In the last half-decade, the three Baltic states have made dramatic progress towards diversifying their energy supplies, especially of natural gas. This progress—brought about thanks to remarkable political will as well as improved regional cooperation—has resulted in considerable economic benefit while decreasing the three countries’ vulnerability to outside pressure. Yet, much remains to be done in order to complete the three countries’ internal markets.
Drawing upon extensive field research and interviews with key experts and officials both in the Baltic region as well in Brussels, Finland, Poland, and beyond, this policy paper begins with a critical review of existing gas supply options to the three Baltic states. Acknowledging that there will “always be a role for Russian pipeline deliveries” to the three countries, it touches upon the impact of the Nord Stream 2 and other upstream Russian projects while providing perspective on the northern (Balticconnector) and southern (GIPL) non-Russian pipeline options as well. After reviewing the state of LNG supplies via Lithuania and gas storage in Latvia, it concludes by identifying ongoing economic, political, and strategic risks to market integration and energy security—and presents ways of mitigating them.