Latvia, Estonia to sign memorandum on natural gas supplies in crisis situations

RIGA - Latvia and Estonia are to sign a memorandum of cooperation Friday on natural gas supplies in crisis situations, according to Latvian Climate and Energy Minister Raimonds Cudars.

The memorandum of cooperation will be signed during the meeting of the prime ministers and the energy ministers of both countries.

Cudars said that the memorandum provides that in a situation when natural gas supplies are disrupted in the region due to technical or any other reasons, Latvia and Estonia can use the infrastructure built in Paldiski port to supply natural gas in the Baltic network.

In the coming two months the countries will also agree on the specific conditions for servicing supplies and gas vessels at the terminal.

As reported, Estonian Minister of Climate Kristen Michal said earlier that Estonia is planning to jointly use the liquefied natural gas (LNG) infrastructure in Paldiski and rent an LNG terminal together with Latvia, however, the plan is not intended as a state intervention in the market, but as a measure for preparedness in possible crisis situations enabling to supply both states with energy.

"We're preparing the contract with Latvia in case the situation in the gas market changes and supply difficulties emerge," Michal said, adding that the contract provides for the supply of natural gas by vessels after the completion of the LNG terminal at the Paldiski port.

The situation in the natural gas market is presently stable, according to Michal. If a critical shortage should emerge, a vessel could be rented jointly, he said.

The Latvian Ministry of Climate and Energy announced in April that it is to start developing the conditions for the joint use of the LNG terminal in Paldiski in order to strengthen the state's security of gas supply.

Michal discussed the preparations for renting the vessel at a meeting with the Latvian climate and energy minister, Raimonds Cudars, and Prime Minister Arturs Krisjanis Karins.

The discussions are still in their early stages and there are not clear plans yet, but according to a preliminary plan, if the need arises to rent the terminal, the states would share the cost.

"The objective is for the neighbors to agree on a clearer framework, based on which we will share the capability of the Paldiski [terminal] and rent an LNG vessel in case any critical difficulties in supply emerge. That way we can get to work immediately if the market situation changes and a critical moment arrives," Michal said.

Drafting a memorandum of understanding between the ministries is the first step towards this goal, according to the minister.