Finland’s wholesale and retail gas markets opened to competition as planned at 7 am on 1 January 2020. The opening is one of the biggest changes in the history of gas use in Finland.
At Suomen Kaasuenergia, we have renewed our operating model, IT systems, gas procurement, sales pricing and billing to meet the new market situation. Implementing these changes and communicating them to customers kept all our staff busy throughout last year. It now appears that the changes have been implemented successfully.
Information is available on our website, from customer service and from our sales team
The customer letters we sent to everyone in November explained the practical changes brought about by the market opening. Our customer service team and your account managers will be happy to answer any questions.
The Energy Authority-approved general terms for gas network services and sales were also updated at the turn of the year. We have prepared a summary, covering the most significant changes.
The pipeline connecting Finland and the Baltic countries is now operational
Gasgrid Finland Oy, Finland’s new wholesale gas transmission company separated from Gasum as part of the market opening, commissioned the subsea Balticconnector pipeline between Estonia and Finland at the turn of the year. Commissioning went well, and gas has been flowing from the Baltic countries to Finland at the available pipeline capacity since the start of the year.
The only slightly disappointing development for the market is the delayed completion of Estonia’s compressor stations. As a result, only around 40% of Balticconnector’s transmission capacity from Estonia to Finland is available this winter.
Interest in gas from the Baltic countries reflects current low prices there. The LNG terminal in Lithuania brings gas from around the world to the Baltic market, priced according to major European gas trading hubs. Exchange prices vary considerably with demand and are generally low in summer and high in winter. Warm weather in Europe this winter has kept exchange-based prices exceptionally low. Prices could, of course, rise quickly if continental Europe turns colder.
The new market brings more pricing options
We also procure a significant amount of gas from the Baltic market. Alongside our established pricing based on oil (Brent), coal (API2) and the domestic market basic price index (D35), we offer gas linked to European gas market prices. We particularly recommend exchange-based pricing for large industrial and process users with steady consumption throughout the year, allowing them to benefit most from lower summer prices.
At Suomen Kaasuenergia, we are very pleased with the market opening. We believe it will also lower gas prices in the long term. The new gas market legislation allows pricing to be developed to suit each user group as closely as possible—tailored to your needs!
Wishing you all the best for the year ahead!
Pekka Karinen, gas procurement and purchase and sales portfolio management