Cutback in EU gas demand bigger than amount received from Russia

TALLINN – The agreement to reduce the gas consumption of European Union member states is important primarily because the amount by which it will be reduced exceeds the amount of gas supplied to Europe from Russia, Estonia's Minister of Economic Affairs and Infrastructure Riina Sikkut says.

On Tuesday, the energy ministers of EU member states approved the European Commission's so-called Winter Package, which sets non-binding gas demand reduction targets for the member states. The goal is to reduce gas consumption by 15 percent in the upcoming heating period. In the event of a serious disruption of supply in the gas market, a state of alert may also be declared at EU level by decision of the member states, in which case this objective would become mandatory.  

"This decision was exceptional if only because it took less than a week from the Commission's proposal to an agreement between member states. This agreement is painful for some member states. For Estonia, meeting the targets in the current situation is not difficult. We would have expected a perhaps even more ambitious approach from others, but in this case showing unity and the quick decision were more important than whether the rate is 13, 15 or 18 percent," Sikkut told a government press conference.

According to the minister, Estonia has not received any gas from Russia since April.

"In addition, it has been agreed in the coalition agreement that the government will decide that we will not use gas from Russia in the future either. If someone should come up with such an idea and wish to do so, we have a basis to take away this possibility," he added.

Despite the fact that consumption is decreasing, according to Sikkut, we still need to work to ensure that the amounts necessary to meet this smaller demand are available to cover the needs of all consumers in Finland and the Baltic region.

In order to do so, the government approved an order on Thursday to increase the share capital of the Estonian Stockpiling Agency by 38 million euros by issuing 380,000 new shares with a nominal value of 100 euros apiece.

With the increase of the share capital, the agency will be given financial security in order to find a solution for concluding an agreement with the consortium building the LNG quay and ensuring the completion of the quay and the entire infrastructure for receiving LNG by the end of this year.

In order to be able to make flexible use of the resources provided by the supplementary budget and to build up the gas reserve to the maximum extent, the government postponed the deadline for creating the reserve of one terawatt-hour until the end of the year.

"Initially, the deadline for this stock to be formed was October 30, because at the storage facility in Latvia, where we store it, the maximum quantity is usually reached before the winter, and then it starts to be consumed. This time it is clear that the race for gas is on, and the Latvian storage facility has changed its terms, allowing to pump more gas into it until the end of the year. In November-December, capacity in the gas pipeline between Latvia and Lithuania has usually become available, so it will also be possible to pump LNG from Klaipeda into the storage facility," Sikkut added.