Latvenergo AS will buy natural gas from Equinor ASA
December 14, 2023
Latvenergo AS has concluded a tender for the medium-term supply of liquefied natural gas (LNG) for 2024–2026. This will be provided by Equinor ASA, the largest supplier of energy to Europe, supplying a total of 6 LNG cargoes or approximately 6 terawatt hours (TWh) of gas over the period, with 2 LNG cargoes each year. The natural gas will be delivered via the Klaipėda LNG terminal.
Thus, Latvenergo AS, by purchasing natural gas in the medium term, guarantees the security of supply of natural gas to the CHPP for power and thermal energy generation, as well as for the sale of natural gas to customers in the Baltics.
“The decisions made last year are paying off – both in the use of the Klaipėda terminal and in building relationships with suppliers to ensure stable and secure supplies, both in time for this season and in readiness for the next three years. We have secured an a very attractive agreement with clear supply conditions with a reliable supplier that has supplied LNG into the Baltics since imports started in 2014, and with the pricing reflecting European market prices through the period,” comments Dmitrijs Juskovecs, Chief Commercial Officer (CCO) of Latvenergo AS.
Now is a favourable period for new natural gas purchases, as this season Europe has historically the highest level of natural gas storage filling, and new bulk supplies are decreasing, which also reduces the price of natural gas. Latvenergo AS and its customers across the Baltics benefit due the Latvian energy company signing a contract with Klaipėda LNG terminal last year, which allows it to buy gas directly from major natural gas producers, thus securing the most favourable terms.
Following the Russian aggression in Ukraine, Latvenergo AS completely stopped purchasing natural gas from Russia in February 2022 and quickly closed deals with companies from the US, Norway, Switzerland and UK. Latvenergo successfully supplied customers with natural gas at a competitive price, and in the first nine months of this year, the gas-fired power generation capacity of Riga CHPP reached 920 GWh, twice as much as in the same period last year. Latvenergo thus generated 34% of all electricity in the Baltic states in the first nine months of 2023.
Norway’s Equinor ASA (formerly Statoil ASA) is a broad, international energy company and the largest supplier of energy to Europe. With its offshore production in Norway as the basis, the company supplies natural gas, crude oil and refined petroleum and is building a sizeable position within generation of renewable power and low carbon solutions, i.e. carbon capture and storage (CCS) and low-carbon hydrogen. Equinor has a presence in around 30 countries around the world.