High gas prices choking Baltics, says minister

  • 2013-11-13
  • From wire reports, RIGA

Baltic government officials warned that plans around the region to expand the use of natural gas to replace dirtier fuels will stall if no new supplies are found to help to bring down prices, reports Reuters.

The region relies heavily on pipeline imports from Russia, which are not price competitive with fuels such as coal for electricity generation and oil in the shipping sector.

Baltic countries such as Finland, Estonia, Latvia and Poland are considering importing liquefied natural gas (LNG) to increase supply and help bring down prices.

But government officials from across the region warned on Nov. 13 that the use of pipeline gas or LNG will not displace coal or oil unless gas can be imported cheaper.

"If the price of pipeline gas continues to be so high, we will move away from gas," Latvia's Economy Minister Daniels Pavluts said at an energy conference in Helsinki, Finland.

Pavluts said that importing LNG could be part of a solution but warned that it was still expensive.

"LNG will transform gas markets into a global marketplace like oil, but the question is at what cost," he said.

Finnish government officials also warned at the same event that Finland's plans to boost gas use for heating, industry and as a shipping fuel could stall if gas prices do not become more competitive.

Finland wants gas, which accounts for 10 percent of its total energy use, to displace much of coal's 11 percent share. New greenhouse gas emission regulations in the shipping sector also are pushing Finland to plan a switch from oil to LNG to fuel most of its coastal vessels.

"If the present situation goes on, the future of natural gas in Finland is very uncertain," said Esa Harmala, director general of the Energy Department at Finland's Ministry of Employment and the Economy.