diff --git a/.env b/.env
index 2186a513b1..95d01c4ab8 100644
--- a/.env
+++ b/.env
@@ -197,7 +197,7 @@ ENABLE_STORAGE_PROVIDER=true
 CLOUD_STORAGE_PROVIDER_NAME=aws
 
 # AWS S3 (replace with your own configuration and credentials)
-AWS_ACCESS_KEY_ID=test-key
-AWS_SECRET_ACCESS_KEY=test-secret
+AWS_ACCESS_KEY_ID=test
+AWS_SECRET_ACCESS_KEY=test
 AWS_REGION=eu-west-1
 AWS_BUCKET_NAME=sample-bucket
diff --git a/docker-compose.localstack.yml b/docker-compose.localstack.yml
index 40930d65b7..f17af893a0 100644
--- a/docker-compose.localstack.yml
+++ b/docker-compose.localstack.yml
@@ -2,15 +2,12 @@ version: '3.4'
 services:
   localstack:
     container_name: local_stack
-    image: localstack/localstack
+    image: localstack/localstack:3.3
     network_mode: bridge
     environment:
       - SERVICES=s3 # we only need s3 bucket
       - DEBUG=1
-      - DEFAULT_REGION=${AWS_REGION}
-      - AWS_ACCESS_KEY_ID=${AWS_ACCESS_KEY_ID}
-      - AWS_SECRET_ACCESS_KEY=${AWS_SECRET_ACCESS_KEY}
-      - LOCALSTACK_ENDPOINT=${LOCALSTACK_ENDPOINT}
+      - LOCALSTACK_HOST=${LOCALSTACK_HOST}
     ports:
       - 4566:4566
     volumes:
diff --git a/docker-compose.yml b/docker-compose.yml
index 961989233b..582718fb1b 100644
--- a/docker-compose.yml
+++ b/docker-compose.yml
@@ -37,6 +37,9 @@ services:
       - ACCOUNT_URI=${COLOSSUS_1_TRANSACTOR_URI}
       - OTEL_EXPORTER_OTLP_ENDPOINT=${TELEMETRY_ENDPOINT}
       - OTEL_RESOURCE_ATTRIBUTES=service.name=colossus-1,deployment.environment=production
+      - AWS_BUCKET_NAME=test-bucket-1
+      - LOCALSTACK_ENDPOINT=${LOCALSTACK_ENDPOINT}
+      - LOCALSTACK_ENABLED=${LOCALSTACK_ENABLED}
     entrypoint: ['/joystream/entrypoints/storage.sh']
     command:
       [
@@ -114,6 +117,9 @@ services:
     environment:
       # ACCOUNT_URI overrides command line arg --accountUri
       - ACCOUNT_URI=${COLOSSUS_2_TRANSACTOR_URI}
+      - AWS_BUCKET_NAME=test-bucket-2
+      - LOCALSTACK_ENDPOINT=${LOCALSTACK_ENDPOINT}
+      - LOCALSTACK_ENABLED=${LOCALSTACK_ENABLED}
     entrypoint: ['yarn', 'storage-node']
     command:
       [
diff --git a/tests/network-tests/.gitignore b/tests/network-tests/.gitignore
index a98fa023c0..9e7dcaacd5 100644
--- a/tests/network-tests/.gitignore
+++ b/tests/network-tests/.gitignore
@@ -1,3 +1,4 @@
 output.json
 data/
 **/generated/*
+.venv/
\ No newline at end of file
diff --git a/tests/network-tests/run-tests.sh b/tests/network-tests/run-tests.sh
index 2f6cf61106..beae3217f0 100755
--- a/tests/network-tests/run-tests.sh
+++ b/tests/network-tests/run-tests.sh
@@ -17,16 +17,15 @@ function cleanup() {
 
   if [ "${NO_STORAGE}" != true ]; then
     docker-compose -f ../../docker-compose.storage-squid.yml down -v
+    docker-compose -f ../../docker-compose.localstack.yml down -v
   fi
 
   docker-compose -f ../../docker-compose.yml down -v
-  docker-compose -f ../../docker-compose.localstack.yml down -v
 }
 
 trap cleanup EXIT ERR SIGINT SIGTERM
 
-export JOYSTREAM_NODE_TAG=${JOYSTREAM_NODE_TAG:-latest}
-RUNTIME_PROFILE=TESTING ../../scripts/runtime-code-shasum.sh
+export JOYSTREAM_NODE_TAG=`RUNTIME_PROFILE=TESTING ../../scripts/runtime-code-shasum.sh`
 CHAIN=dev docker compose -f ../../docker-compose.yml up -d joystream-node
 
 sleep 30
diff --git a/tests/network-tests/start-storage.sh b/tests/network-tests/start-storage.sh
index addbfa9948..8e6eb5cffb 100755
--- a/tests/network-tests/start-storage.sh
+++ b/tests/network-tests/start-storage.sh
@@ -6,32 +6,38 @@ TMP=$0
 THIS_DIR=$(dirname $TMP)
 
 echo "Staring storage infrastructure"
-export LOCALSTACK_ENABLED=true
 
 # Start Storage-Squid
 docker-compose -f $THIS_DIR/../../docker-compose.storage-squid.yml up -d
 
-HOST_IP=$($THIS_DIR/get-host-ip.sh)
+HOST_IP=`$THIS_DIR/get-host-ip.sh`
 export COLOSSUS_1_URL="http://${HOST_IP}:3333"
 export DISTRIBUTOR_1_URL="http://${HOST_IP}:3334"
 export COLOSSUS_2_URL="http://${HOST_IP}:3335"
 export DISTRIBUTOR_2_URL="http://${HOST_IP}:3336"
-export LOCALSTACK_ENDPOINT="http://${HOST_IP}:4566"
 $THIS_DIR/run-test-scenario.sh initStorageAndDistribution
 
 # give QN time to catch up so nodes can get their initial state
 sleep 30
 
+# Start localstack if ENABLE_LOCALSTACK is set to true
+export LOCALSTACK_ENABLED=true
+export LOCALSTACK_HOST="${HOST_IP}:4566"
+export LOCALSTACK_ENDPOINT="http://${LOCALSTACK_HOST}"
+docker-compose -f $THIS_DIR/../../docker-compose.localstack.yml up -d localstack && sleep 15
+python3 -m venv .venv
+pip install awscli-local
+source .venv/bin/activate
+awslocal s3api create-bucket --bucket test-bucket-1 --endpoint ${LOCALSTACK_ENDPOINT}
+awslocal s3api create-bucket --bucket test-bucket-2 --endpoint ${LOCALSTACK_ENDPOINT}
+deactivate
+
 # Start colossus & argus
 docker-compose -f $THIS_DIR/../../docker-compose.yml up -d colossus-1
 docker-compose -f $THIS_DIR/../../docker-compose.yml up -d distributor-1
 docker-compose -f $THIS_DIR/../../docker-compose.yml up -d colossus-2
 docker-compose -f $THIS_DIR/../../docker-compose.yml up -d distributor-2
 
-# Start localstack if ENABLE_LOCALSTACK is set to true
-docker-compose -f $THIS_DIR/../../docker-compose.localstack.yml up -d localstack
-awslocal s3api create-bucket --bucket $AWS_BUCKET_NAME --endpoint http://localhost:4566
-
 # allow a few seconds for nodes to startup and display first few log entries
 # to help debug tests
 sleep 30