Energy, Gas, Latvia, Legislation

The company’s net profitability was 8% in the first half of this year compared to 10.2% in the respective period last year, which is related with expenses for opening of the gas market.

In the first half of 2017 the company as an integrated natural gas distribution system operator and natural gas trader ensured the supply of natural gas to 443,000 customers in Latvia and continued the trading of natural gas abroad, which it had engaged in last year, with 60 MWh sold in the first six months.

Total sales of the company amounted to 7,668 MWh in the first half of 2017, which is a decrease of 4.6% compared to the first half of 2016, due to the high average air temperature in the most active months of the natural gas trade.

To comply with the Energy Law requirements, separation process of the operator of natural gas distribution system and natural gas trader was commenced in the first half of the year with the plan to complete until January 1, 2018. It is planned that the distribution system operator will be separated into a subsidiary, thus maintaining a vertically integrated group.

The company must continue the reorganization process until the end of 2018 and to perform the necessary preparation works for successful separation of distribution and trade segments from January 1, 2018, which is necessary to meet the Energy Law requirements. Reorganization will result in foundation of a 100% subsidiary company Gaso, which will take over the distribution functions from Latvijas Gaze. Further Latvijas Gaze will be a parent company operating in the field of gas trade, the company’s management said.

In the first half of 2016, Latvijas Gaze made a profit of EUR 26.824 million on a turnover of EUR 181.902 million. These figures have been adjusted to ensure comparability of the financial statements after the unbundling of the company's operations and transfer of the gas transmission and storage assets to the newly-created Conexus Baltic Grid last year.

The largest shareholders of Latvijas Gaze are Russia's Gazprom (34%), Marguerite Gas II (28.97%), Uniper Ruhrgas International (18.26%) and Itera Latvija (16%).