Energy, EU – Baltic States, Gas, Latvia, Legislation

She also expressed support to the Economy Ministry's report on gas market liberalization, which foresees dividing Latvijas Gaze into two companies.

At the same time, Straujuma emphasized that all legal regulations will be observed, so that the gas market liberalization process is in accordance with the law.

Straujuma also told members of the press that the concerns raised by some in regard to the liberalization process are not reasonable, as the Economy Ministry, in drawing up the plan, consulted with legal experts which rejected these concerns and deemed the ministry's arguments as well-founded.

At the same time, Straujuma also said that there should not be problems moving this bill forward at Saeima, as the coalition has been united on this matter so far.

As reported, the government today approved the motion to break up the Latvian gas supply company Latvijas Gaze.

The Economy Ministry informed the government that Latvijas Gaze is both a gas supplier and a gas storage operator. This is why the most important task is to separate gas supply and sale from gas distribution and storage. The ministry reported that there are three breakup models – an independent supply operator, an independent system operator, and partition of property rights.

In case of an independent supply operator, the supply system would belong to its operator, while the supply operator would remain as part of Latvijas Gaze – either as a subsidiary or a new commercial company, owned by Latvijas Gaze shareholders.

This also means that the supply operator would be completely independent from Latvijas Gaze.

Because the independent system operator model has been implemented in only a number of EU member states, it will not be discussed.

The Economy Ministry indicated that by implementing the partition of property rights model, Latvijas Gaze would have a sister company, which would act as a supply system operator, as well as own the supply system assets and a license to provide natural gas supply services. The company would be independent from Latvijas Gaze, and its shares would belong to independent individuals, unrelated to Latvijas Gaze.

After accepting the ministry's report, the government decided to approve the partition of property rights of the natural gas supply system operator as of April 3, 2017, stipulating that the supply operator would also deal with the natural gas storage infrastructure. The government's decision also stipulates the establishment of a sister company, which would deal with natural gas supply and storage infrastructure.