Ready for opening the natural gas market

Gasum has thoroughly prepared for greater competition. The company’s key assets are a good knowledge of customer needs, reliable service and supply security.

Finland’s entire energy sector will be transformed with the opening of the pipeline gas market to competition. Gasum’s CEO Johanna Lamminen has followed the change firsthand, since Gasum has had a seat at the tables at which, among other things, the new business model has been built. Preparations for the change, which enters into force on January 1, 2020, have been ongoing since summer 2017.

Gasum has worked together with the authorities, customers and other stakeholders. Under the reform, the gas transmission grid will be unbundled from Gasum into a separate company. This will enable also competitors to import and sell natural gas through the transmission grid.

“We expect interest in the Finnish gas market from international actors, who have already operated in a competitive market in the Baltics, for example.”

Earlier competition with gas

According to Lamminen, opening up the gas market to competition is a major event symbolically. However, in the same breath she also notes that outside the transmission grid, the market for liquefied natural gas, LNG, is already open to competition. The same goes for the production and sale of biogas in Finland.

“Greater competition will allow customers to buy gas more flexibly than earlier. Gas traders for their part will be able to develop products that are better suited to customer needs.”

New services refer to various bundled services, where Gasum can look after the customer’s entire energy supply including, for example, gas and electricity.

“Our competitive assets are that we have a good knowledge of customers and their needs. Customers also know Gasum well. All the same, this is not enough. We must be able to serve customers better than earlier and further develop our services.”

According to Lamminen, more than anything else customers appreciate reliable service and supply security.

“Good service also means us being able to flexibly respond to changing customer needs.”

Growing demand for LNG

Johanna Lamminen thinks that the growth prospects for the gas transmission market are limited. The existing 1,300-km network covers eastern and southern Finland and no power plants or industry using significant amounts of gas are expected to be built along its route.

Looking ahead, the pipeline network will continue to be an important part of gas distribution. Nevertheless, there is no prospect of, for example, expanding the transmission grid to new places. Growth of the gas market will take place outside of the transmission grid in future years.

This means, for example, strong growth in the use of LNG. Besides traditional industrial use, maritime and heavy-duty road transport will increase demand for LNG.

Gas distribution systems developing

Gasum has prepared for growth by systematically developing LNG distribution systems in the Nordic countries. In Finland, Gasum has LNG terminals in Pori and Tornio (Gasum is a shareholder), and a third terminal, belonging to another actor, is under construction in Hamina.

Gasum is also continuously investing in the construction of new LNG filling stations for heavy-duty transport in Finland, Sweden and Norway.

“National targets have also been set to increase cleaner transport. For example, Finland’s Government Programme has a number of policies promoting the use of gas a transport fuel.”

Reducing emissions as a common goal

According to Lamminen, environmental issues play a key role in growth of the gas market. In future years, natural gas will provide a cost-effective way to reduce carbon dioxide emissions as the Nordic countries migrate to carbon neutral energy production.

“Emissions can be significantly reduced if, for example, natural gas replaces diesel or coal. Gas makes it possible to respond to emission cuts today, not in 15 years time,” Lamminen points out.

Natural gas solves problems at sea

Many aspects advocate the use of natural gas: it produces no sulphur dioxide and particulate emissions, and also nitrogen emissions are reduced by 85%. This is why, for example, maritime transport is rapidly switching over to using LNG, which meets all increasingly stricter international and internal EU emissions limits for shipping.

Gasum has developed a distribution system for maritime transport so that bunkering can take place onshore, from a tanker truck or ship-to-ship.

Biogas is rising on the Finnish gas market

“A functioning natural gas distribution system gives a good basis for increased biogas production and use,” Johanna Lamminen points out.

“Biogas is the circular economy at its best since besides low-emission energy, it also combines efficient use waste and nutrients.

The potential amount of biogas produced in Finland alone is estimated to be around 10 TWh a year. The amount would be enough for the needs of around a million gas cars. At present, only around 4% of biogas production potential has been utilised.

“We are the largest actor on the Nordic biogas market and we plan to continue growing.”

Gasum currently owns 13 biogas plants in Finland and Sweden, and also sources biogas from three partnership plants. The company has invested in building biogas plants in Lohja (Finland), Nymölla (Sweden) and in expanding the biogas plant in Turku (Finland).

17.12.2019