Joint appeal to the Latvian government and to the gas TSO-s

03.04.2020

Mr Arturs Krišjānis Kariņš, Prime Minister of Latvia
Mr Jānis Vitenbergs, Minister for Economics of Latvia
Mr Jānis Reirs, Minister for Finance of Latvia
Ms Zane Kotane, AS Conexus Baltic Grid
Mr. Rolands Irklis, Chairman of the Publlic Utilities Commission
Mr Christian Zinglersen, The European Union Agency for the Cooperation of Energy Regulators
Mr Taavi Veskimägi, Elering AS
Mr Olli Sipila, Gasgrid Finland OY
Mr Nemunas Biknius, AB Amber Grid

Copy:
Mr Taavi Aas, Minister of Economic Affairs and Infrastructure of Estonia
Mr Martin Helme, Minister of Finance of Estonia

Joint appeal of the energy companies to the Latvian government and to the system operators of Finland and the Baltic States due to stoppage of operation of the transnational Balticconnector pipeline

Energy companies of the Baltic States and Finland cannot agree with the plan of AS Conexus Baltic Grid to stop operation of the Balticconnector between Estonia and Finland for entire May 2020 at such short notice and at the time which is critical enough already. The stoppage is due to planned reconstruction of the Vireši-Tallinn pipeline by AS Conexus Baltic Grid which was published only on 20th of March 2020.

We have tried in good faith to reach a joint agreement with AS Conexus Baltic Grid regarding postponement of the reconstruction works, however, our attempts have been unsuccessful. Therefore, we appeal to the system operators of the three Baltic States and Finland, and to the Latvian government, to find a solution that will take into consideration interests of joint gas market and all its participants.

Performance of the works during the period between 1 May and 31 May 2020 will cause damage to economic activity of the market participants due to the following reasons:

• Extensive economic damage. The reconstruction works would stop operation of the Balticconnector pipeline for the entire May. The use and volumes of the pipeline have been relied upon by all market participants, and the resulting damage will amount to millions of euros.
• Short time of advance notice. The advance notice time of just one and half months does not comply with EU regulations and agreements entered into with transmission system operators and does not let the market participants take the stoppage into consideration in planning their business and entering into contracts with clients, find reasonably priced supply sources, or reorganise work.
• Growth of uncertainty. The reconstruction works have not received approval of the Estonian, Lithuanian and Finnish system operators. Such hasty behaviour which does not take interests of the market participants into account puts reliability of subsequent operation of the pipeline, as well as cooperation capacities and energy security of the states, in serious doubt.
• Complicated economic situation. One has to consider that due to the fast spread of the coronavirus, the governments, companies and consumers of all the three states have found themselves in an extremely challenging situation, and the need to spend additional millions of euros during the forthcoming months makes the situation even more difficult.

Therefore, the only possible solution for the situation can be as follows:

• Postponement of the works. Conexus has to postpone all reconstruction works planned in May 2020 for at least a year. That way, the market participants can take into account the situation and reorganise the supply.
  
• Longer notice period. The planned reconstruction work has to planned for a longer time horizon, and the market participants have to be notified of such works at least a year in advance.
• Cooperation between the states. Cooperation between the system operators of the states needs to be strengthened and the approval of all similar large-scale and long-term reconstruction work has to be consensual.

We really hope that you will find a way to postpone the reconstruction works for at least a year to avoid the extensive economic damage to the market participants!

We hereby inform you, that in case we should bear the damages due to the unexpected stoppage of the gas flow, we will have no other option than to claim such damages amounting to millions of euros from the transmission system operators.

Best regards

Ants Noot
AS Eesti Gaas (Estonia)
Chairman of the Management Board

Kalev Reiljan
Elenger Oy (Finland)
Member of the Management Board

Aivo Adamson
AS Alexela (Estonia)
Member of the Management Board