Latvia has joined forces with Finand and Estonia to create a three-country marketplace for natural gas, with the unified system officially launched January 1, reported Estonian gas supplier Elering.

"The first quantities of natural gas on the common gas market between Estonia, Latvia and Finland launched today, 1 January 2020, flowed from Latvia to Finland via Estonia," Elering said. The gas flowing to Finland on the first day of trading originated from the Inčukalns facility in Latvia, from which gas sellers supply their customers in Finland.

Inčukalns is the only underground gas storage facility in the Baltic countries, which helps ensure stability of natural gas supply in Latvia and throughout the region.

The new zone of competition was enabled by the recent completion of the Estonian-Finnish gas link, Balticconnector.

“The launch of the new market area has meant a significant increase in the activity of cross-border gas trading between these countries. Consumers and the economy of the entire region stand to benefit from the increased competition. The results of the first day of trading on the common market clearly confirms that the establishment of Balticconnector was the right decision, in spite of the scepticism broadly expressed in regard to the necessity of the connection,” said the chairman of the Elering management board, Taavi Veskimägi.

Zane Kotāne, Conexus Chairman of the Board said: "Launching the Single Market marks a major turning point for the energy industry, demonstrating that several countries are able to work together to strengthen their energy independence and work towards more efficient use of infrastructure on a transnational scale. In addition, the Baltic-Connector Estonia-Finland interconnector, which opened in December and will integrate into the single market, will put an end to Finland's isolation and allow us to supply natural gas to the Finnish market for industrial use."

In the past, transmission fees had to be paid for moving gas from one country to another, but now gas can flow within the common Estonian-Latvian-Finnish gas market without extra charges. Transmission fees for maintenance of the gas network are payable only if gas enters or exits the common market. Revenue generated at the external borders of the single market area will be shared between the three countries.

The gas market covering Estonia, Latvia and Finland is the first bidding area in Europe to encompass three countries.

The gas system operators Elering, Latvia's Conexus Baltic Grid and Gasgrid of Finland have formed a monitoring group for the opening of the new market and have pledged to continue cooperation for further development of the regional gas market.

The annual volume of the gas market in the three-country bloc is approximately 40 terawatt-hours. Negotiations on the possible accession of Lithuania to the system are ongoing.

Conexus Baltic Grid has a handy list of FAQs regarding the project available on its website.