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Natural gas year 2014: Gas consumption further decreased by warm weather, inexpensive spot-priced electricity and cheap coal

In terms of climate, 2014 was the second-warmest year ever recorded in Finland, and this also had a major impact on the annual consumption of natural gas.

In addition, the long-prevailing low price trend seen in the Nordic electricity market and emissions trading still continued, further reducing the competitiveness of natural gas in combined heat and power (CHP) production – most of all against coal, the world market price of which is very low.  At the annual level the consumption of natural gas totaled 29.3 TWh, down 12% on 2013 (33.2 TWh).

Natural gas price development remained quite stable until September 2014, after which the energy charge of natural gas was pulled down by the world market price of crude oil, with the rate of decrease accelerating towards the end of the year. The change in price level, which for natural gas ended up entailing a record rate of drop, is anticipated to affect the natural gas energy charge at least until summer 2015. In terms of the annual average price, the drop in the natural gas energy charge was around 6% (around €2/MWh) on the level seen in 2013, and the rate of decrease in the natural gas energy charge is still forecast to exceed 30% in 2015.

Biogas production capacity increased  Gasum’s biogas production capacity increased considerably in late 2014 as a new facility with an annual capacity of 50 GWh was opened in Kujala, Lahti, Finland. The amount of biogas injected into the network totaled 33,877 MWh in 2014. Biogas was fed into the network from Mäkikylä, Kouvola; the Suomenoja wastewater treatment plant, Espoo; and from November also from Lahti. Biogas was sold for use as a vehicle fuel from Gasum’s 18 public filling stations, where the share of biogas rose to 40% of the total. Gasum’s biogas was also sold for transport use by two other distributors, operating in Hamina and Mäntsälä. The year also saw the launch of the sales of biogas for other natural energy gas uses, including a variety of industrial applications, property heating and residential use.

Liquefied natural gas (LNG) sales went up  The delivery volumes of LNG increased following the Skangass acquisition. Skangass supplied a total of 286,000 tonnes of LNG in Finland, Sweden and Norway, up 35% on 2013. The third Skangass LNG terminal became operational in Lysekil, Southern Sweden. The investment decision for Finland’s first LNG terminal was made in the autumn, and construction began in Tahkoluoto, Pori. The terminal is hoped to be completed in autumn 2016. Skangass also made an investment decision concerning the Manga LNG terminal in Tornio, Finland, with Outokumpu, SSAB and EPV Energy.

Peak consumption period seen in late January The peak consumption period in the 2014 gas year was seen in late January. The highest level of consumption per day was reached on January 24, with a total of 185 GWh/day (18.2 million m3) consumed, while the highest rate of hourly gas consumption was in the 9:00–10:00 period when the average hourly gas demand rose to 8,448 MW. The highest ever peak for natural gas consumption was seen on February 18, 2011, with the daily consumption totaling 22.1 million m3.

The imports and usage trials of natural gas began in Finland in late 1973. At the end of 2014, the length of the Finnish natural gas transmission network totaled 1,287 km, while the total volume of natural gas imported to Finland by the end of 2014 amounted to 109.5 billion m3.

– Despite the major decrease in natural consumption last year, the volumes of LNG and biogas increased. We’re determined to ensure our customers’ access to competitive energy and are constantly working hard to achieve this. The gas system needs to be developed as a whole, and gas production and sourcing channels must be diversified.  Last year we developed the LNG infrastructure, and our new biogas facility also began operations. We’ll continue to invest in our LNG business as well as biogas and transport solutions this year, says Gasum CEO Johanna Lamminen.

More information:

Ossi Savolainen  Head of Wholesale Trade in Energy, Gasum
Phone: +358 20 44 78 632, firstname.lastname(a)

Jukka Metsälä  Head of Biogas and transport solutions, Gasum
Phone: +358 20 44 78 656,  firstname.lastname(a)

Tommy Mattila  Director, marketing and sales, Skangass
Phone: +358 20 44 78 523 firstname.lastname(a)