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

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The prime minister said that experts are holding talks with three shareholders, and a decision should later be made whether the state will purchase shares in Incukalns gas storage facility.

"In this issue, it is important to understand how much they will cost as we are not ready to buy shares at any price," the prime minister said.

As reported, the Baltic prime minister met in Incukalns last week and underscored the regional importance of the Incukalns gas storage facility that will promote operations of the regional gas market and security of gas supplies.

The prime ministers shared an opinion that the solution should be economically sustainable in order to develop a fully functioning regional gas market and ensure security of gas supplies to the Baltic states.

As reported, the Latvian parliament in February 2016 passed amendments to the Energy Law to support liberalization of the gas market and the rules on unbundling Latvijas Gaze natural gas utility. Under the amendments, Latvijas Gaze has to be split up in two companies - one for operating the gas transmission and storage system and the other for dealing with natural gas distribution and sale - by April 3, 2017, and the former has to be separated from Latvijas Gaze by December 31, 2017.

Conexus Baltic Grid, which will take over natural gas storage and transmission functions from Latvijas Gaze, was established on December 22, 2016. Its largest shareholders are Russian Gazprom (34.1%), Marguerite Fund (29.1%), Germany's Uniper Ruhrgas International GmbH (18.3%) and Itera Latvija (16%) or the same as Latvijas Gaze shareholders. But the shareholders, with the exception of financial investor Marguerite Fund, have to dispose of their shares in Conexus Baltic Grid by the end of 2017 so that the new shareholders would not be related to Latvijas Gaze.