The Creation of the Integrated Natural Gas Market in the Baltic Region and its Legal Implications

Abstract

A common natural gas market in the Baltic region, which is in operation since 1 January 2020, means a single entry-exit tariff system for the natural gas transmission among Finland, Estonia, Latvia, and a common Latvian-Estonian balancing zone. Finland joined the market with a separate balancing zone, certain rules, contracts, invoices and billing, with a decision for full integration to be taken not earlier than in 2022. Lithuania is not currently the common market participant, because it is not ready to join it with such revenue splitting conditions as Finland, Estonia and Latvia. But still common entry-exit tariff zone countries are actively working to find a viable solution for market expansion. Lithuania and other neighbouring Member States of the European Union (hereinafter-the EU), first and foremost, Poland, are welcome to join. The creation of an integrated regional natural gas market in the Baltics in the long term will stimulate the interest of traders in the region, strengthen security of supply and improve market liquidity. Increased market competition, predictable prices in the long term, transparent tariffs, digital communication and customer-oriented business strategies are just a small part of benefits that will inevitably develop with time.