Latvenergo and Equinor Enters a Medium-term Agreement for LNG Supply for 2024-2026

Latvenergo, the state-owned power and natural gas company of Latvia, has recently finalized an agreement for the medium-term supply of liquefied natural gas (LNG) for the years 2024–2026. This deal was confirmed following the completion of a tender process. The agreement sees Norway's Equinor committing to supply Latvenergo with a total of six LNG cargoes, distributed evenly over the three-year period, amounting to approximately six terawatt hours (TWh) of gas.

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This strategic move by Latvenergo is said to ensure the continuous and secure supply of natural gas, which is vital for the generation of power and thermal energy at the Combined Heat and Power Plant (CHPP). Moreover, it supports the sale of natural gas to various customers within the Baltic region. This development follows Latvenergo's decision last year to secure a ten-year regasification capacity at the Klaipedos Nafta-operated Floating Storage Regasification Unit (FSRU) in Klaipeda, Lithuania. This capacity booking aligns with the annual requirement of about six LNG cargoes or 6 TWh.

In response to the Russia-Ukraine conflict, Latvenergo had previously expanded its LNG procurement strategies in March of the preceding year, which included purchases for delivery via Klaipeda. Remarkably, the company ceased all natural gas purchases from Russia in February 2022, marking a significant shift in its sourcing strategy.

Latvenergo's chief commercial officer, Dmitrijs Juskovecs, commented on the effectiveness of the decisions made in the past year. He highlighted the benefits reaped from utilizing the Klaipeda terminal and establishing robust relationships with suppliers. These measures, according to Juskovecs, have not only catered to the immediate seasonal demands but have also laid a stable foundation for energy supplies in the coming three years.

He emphasized the attractiveness of the agreement with Equinor, noting its clarity, reliability, and alignment with European market prices. The partnership with Equinor, a company that has been supplying LNG to the Baltics since 2014, stands as a testament to Latvenergo's commitment to secure and diversified energy sourcing amidst changing global dynamics.

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According to the article by Procurement Resource, Latvenergo has secured a medium-term deal with Norway's Equinor for six LNG cargoes from 2024-2026, enhancing energy security in the Baltics and marking a shift away from Russian gas.