Energy results of the year in the Baltic States: we pay more and rejoice

Alexey Belogoryev, Research and Development Director of the Institute for Energy and Finance, commented to BaltNews on the impact of EU countries' abandonment of Russian gas on the dynamics of wholesale gas prices in Europe.

According to Alexey Belogoryev, according to data on sea shipments, there are no supplies of Russian LNG to the Baltic countries. It is possible that it is being transported by trucks through the Pskov region. But in general, it must be said that Lithuania, Latvia and Estonia can physically do without gas from the Russian Federation in any form. Another question is what the consequences will be.

"In general, the abandonment of Russian gas has already led to a significant increase in the average price of natural gas. Moreover, this has not been a problem for the last two or three years. It is long-lasting, because Russian gas was important not only because of its share in the European market. Its supply was practically unlimited. The EU countries could count on an increase in supplies. Until 2020, the Russian Federation did not limit this in any way.

In other words, there was an almost unique situation when the market has an almost inexhaustible source of gas, including to cover peak demand. It was a great help. But the supply of LNG on the market is sharply limited.

There is little capacity for liquefaction, and a number of existing LNG plants have either been shut down or are producing less than expected. And in 2024, we saw a shortage of liquefied natural gas supply on the market. Yes, there is a small increase in international trade, but only 3 million tons – and that's in Asia. In Europe, LNG imports, on the contrary, decreased. Because of this, prices have increased," the expert noted.

Alexey Belogoryev believes that in 2025 the situation will be about the same. And this is not a specific situation for the Baltic States. Lithuania, Latvia and Estonia are in the same conditions as the rest of Europe. Average annual prices are higher than they were in the 2010s.