ENTSOG GRIP BEMIP 2014-2023 / Main Report

2.1 Summary of the

Latest Changes in the BEMIP Region

Historically, the gas markets of the BEMIP region mostly has been dependant on a single (or dominant) supplier and segmented. However, the changes are under way. Most of the countries belonging to the BEMIP region such as Finland, Estonia, Latvia and Lithuania are still dependent on a single gas source from Russia. Poland has a possibility of diversification of gas sources. The country imports gas from Russia but also has both a connections to other EU markets (though on a limited scale, hence upgrades of IPs with other EU grids are planned) and possesses its own domestic production. Denmark and Sweden are interconnected to each other and historically are supplied from Danish North Sea gas production. By completion of the project of Ellund-Egtved enhancing the capacity of interconnection between Germany and Denmark they have got the access to other European markets. Looking at the near future, the infrastructure projects which have already been under implementation will provide alternative gas source – access to LNG market to some of the countries in the region when, the LNG terminals in Świnoujście and Klaipeda will be put into operation by the end of 2014. Besides, the ensurance of physical reverse flow in Polish section of Yamal pipeline will provide the access to Western markets for Poland on much more secure basis starting from Q2 2014. Other planned gas infrastructure projects, currently, are still awaiting for the final in- vestment decision to be taken, will provide more of supply opportunities for the markets and increase security of supply situation. However, in supply side having a focus on diversification by means of additional infrastructure, on demand side the national energy strategies mostly are orientated at quite limited role of natural gas in primary energy balance, which in case of some countries even taking into account the increasing economies, lead to contraction of gas demand volumes, like in Denmark and Lithuania, or having quite a moderate increase in case of other countries, except Poland, where expected conversion from coal fired power plants, should lead to significant increases in gas consumption. Most of the countries belonging to the BEMIP region plan to increase the share of renewables in energy consumption by reducing the share of natural gas. Looking at the perspectives of gas transmission in the light of climate-related governmental policies, the anticipated reduction of gas use because of renewables is alleviated by the increasing focus on biogas and synthetic natural gas (SNG), which at most is emphasized in the national energy strategy of Finland, which foresees a cut in nat- ural gas volumes by replacing them with biomass-based solutions and SNG made from local wood. With quite reserved prospects of grid-related gas consumption, there’s an ex­ pectation increasing of off-grid consumption of gas. Large part of it accounts for bunkering services for vessels provided in LNG terminals, also increasing use of gas for transportation (trucks and other vehicles) needs. But also LNG terminals built in remote areas (Pansio and Tornio) will provide access to natural gas for industry and other needs.

Baltic Energy Market Interconnection Plan GRIP 2014–2023 | 11