Estonia and Latvia plan to conclude an agreement that will allow joint purchases of liquefied natural gas (LNG) in cases when natural gas becomes scarce, writes ERR News.
Climate Minister Kristen Michal said: “We are preparing an agreement with Latvia, in case the situation on the natural gas market should change to the extent that supply difficulties arise.”
The agreement envisages that LNG would be delivered to the Port of Paldiski with the Floating Storage Regasification Unit. Michal stated that the situation is currently stable and there is no need to supply additional natural gas.
If forecasts warn of a possible crisis, the two countries could buy gas together.
The Ministry of Climate and Energy of Latvia has reported that it will start preparing the necessary documentation to be able to jointly use gas from the Paldiski LNG terminal with Estonia. Michal met with Latvian Climate and Energy Minister Raimonds Čudars and Prime Minister Krišjānis Kariņš, and indicated that the negotiations are still in the early stages, which means that there are no concrete plans yet, however, the mutual memorandum of understanding already states that the two countries will share the costs. At the moment, the main goal is to agree on common conditions. Michal said: “That way, when the market situation changes drastically and a crisis develops, we will be able to react immediately.” The next step is to conclude a memorandum of objectives between the ministries.
In Latvia, too, it was planned to build an LNG terminal similar to the one in the port of Paldiski, however, in February this year, the government abandoned this idea. The construction of the Paldiski port terminal has also been hampered by disagreements between the state and the private sector.
A part of Estonia’s natural gas reserves is located in Inčukalns storage in Latvia.
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