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

Government and ministry representatives visited Norway this week, where they also met with representatives from Statoil. Reizniece-Ozola said that the Statoil representatives expressed the desire to supply Latvia with liquefied natural gas.

She added that the price will be dependent on various factors.

She said that the cooperation with Statoil will move forward after Latvia has opened the gas market. In order for Latvia to receive shipment of gas, it will have to have its own LNG terminal, otherwise gas supplies would be too expensive.

Reizniece-Ozola also said that the Norwegian company BW Maritime could construct the proposed LNG terminal, with which the Latvian representatives met with earlier this week. She added that in the most optimistic scenario, such an LNG terminal could be in full operation in three years in the earliest.

As reported, earlier this month, the government 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.