London — The only large-scale gas storage site in the Baltic region -- the 2 Bcm Incukalns facility in Latvia -- is undergoing a "complex" modernization aimed at increasing the site's flexibility and adapting it to meet market needs, the head of the facility Rinalds Dimins said in an interview.
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Incukalns has seen increased interest from traders in 2020 due in part to the creation of a single gas market in the Baltic region from the start of the year and the new interconnection between Finland and Estonia.
The facility was filled to its 2 Bcm capacity in October for the first time since 2014.
Operator Conexus Baltic Grid has at the same time embarked on a modernization program at a cost of Eur88 million ($104 million), Dimins said.
"Incukalns is currently undergoing significant changes -- a complex storage modernization project is in progress [...] simultaneously with day-to-day work and newly generated initiatives," Dimins said.
The aim of the work is to be technically more flexible. "We need to be prepared to meet market needs by adapting to system users' demands in terms of gas withdrawal and injection," he said.
"By increasing the flexibility of technological equipment, we will be able to provide a bigger freedom of choice to market participants," he said.
"Up to now, we have created new guidelines for managing work with market participants successfully, including the way of marketing the available storage capacity and its technical capabilities."
As part of the upgrade work, operational wells at Incukalns are undergoing modernization.
There are 36 wells involved in the project and this year Conexus decided to deal with five wells, having worked on six in 2019.
A second major project is the modernization of the 12Z330 gas pumping units, which has a "huge impact" on daily operational processes in the facility, Dimins said.
A third element is the reconstruction of gas collection point No.3, which is currently at the design stage. A new procurement has been announced in order to obtain the supply of necessary basic equipment, Dimins said.
Conexus last year commissioned the gas collection point No. 2, which took five years to complete at a cost of Eur23 million.
Dimins said the company was also planning the purchase and installation of a new gas pumping unit, which is expected to be implemented by 2024 at a cost of Eur20 million.
The design work for the project is provided by Slovakia's GasOil Technology, according to the result of an open tender.
"All the necessary technical data is currently being collected and consulting sessions are being carried out between the designers and Conexus specialists," Dimins said.
In addition to the structural projects, Conexus is also implementing an asset management system to digitalize processes, including the transfer of equipment maintenance, development processes and related documentation into digital form.
"The biggest challenge of this project is to change the habits that employees have had for decades, looking at the usual processes, such as system maintenance organization, control and reporting mechanisms, from a completely different point of view," Dimins said.
"It is important to emphasize that we are not only moving from paper to digital form, but also changing the principles of how the system would be maintained and accounted for," he said.