Finnish, Estonian and Latvian Gas TSOs Remove Transmission Tariffs

The Finnish, Estonian and Latvian gas transmission system operators (TSOs) have signed an agreement on the removal of transmission tariffs and compensation of transmission costs between the countries. 

The interconnected natural gas markets of Finland, Estonia and Latvia will open to competition in the beginning of 2020 once the Balticconnector pipeline is up and running.

Balticconnector gas pipeline, between Finland and Estonia, when completed will enable the opening of the gas market in Finland.

“The agreement between the TSOs to remove transmission tariffs means that the first stage of building a regional natural gas market that comprises Finland and the Baltic States will be reached early next year. This arrangement between three countries marks a significant achievement in regional energy cooperation, and is the first of its kind in Europe. We have every reason to be proud of it,” said Kimmo Tiilikainen, minister of the Environment, Energy and Housing.

The ITC (inter-transmission system operator compensation) agreement between the transmission system operators will remove gas transmission tariffs on borders between Finland, Estonia and Latvia, and will impose an equal entry fee on all import points starting from the beginning of 2020. The transmission system operators will settle the costs of transmission in the interconnector pipelines between themselves.

Gasum Corporation and Baltic Connector Oy represented Finland in the negotiations.

The Parliament adopted the proposal with no changes in early February. It is scheduled to be ratified at the presidential session in February and to come into force within the next few weeks.