ABSTRACT
This chapter illustrates the basic features of the emerging, global Liquefied Natural Gas (LNG) market. It focuses on the Baltic region. The politics of LNG in Lithuania, Estonia and Latvia is in particular analysed, considering both the domestic dynamics and the role of important external players such as the European Union (EU) and Russia. The chapter focuses on the three main Western Mediterranean consumers (France, Italy and Spain) that were among firsts 'old' member states to build LNG receiving terminals in 1970s and 1980s. In 1990s, worldwide investment in LNG infrastructure grew. Economies of scale throughout the value chain and technical advances facilitated cost reductions making LNG more competitive. LNG regasification terminals were incentivised in the context of the EU internal energy market (IEM) rules. When Estonia, Latvia and Lithuania gained independence, their energy infrastructural systems were still integrated with the former Soviet one. In the gas sector, supplies were brought to the Baltics only from Russia via Gazprom-owned pipelines.
