EU says Latvia must open up its gas market (updated)

Latvijas Gaze AS

02/12/2015 16:26

(Changes dateline, adds quotes, details) 
    RIGA, Dec 2 (Reuters) - Latvia must open its gas market to 
competition and comply with EU rules now the country can access 
alternative supplies, thanks to a key pipeline upgrade in 
neighbouring Lithuania, the European Commission has told the 
Baltic state in a letter. 
    Latvia has the only underground gas storage facility in the 
Baltic states, and being in the middle of Lithuania and Estonia, 
is a key for the regional gas market to appear. 
    "This pipeline, used in conjunction with the Klaipeda LNG 
terminal, will allow a substantial part of Latvia's peak 
consumption of 12.5 million cubic metres/day to come from an 
alternative source," the letter seen by Reuters said. 
    The pipeline's commissioning sets the end of Latvia's 
exemption as an isolated market and the date from which Latvia 
must fully apply the provisions of EU's Gas Directive, it added. 
    Lithuania's gas transmission system operator Amber Grid 
completed upgrades of the pipeline running from the Klaipeda LNG 
terminal to Latvian border, in October and plans to commission 
it formally in December. 
    "I think it says very clearly that ... we don't have any 
longer a unique situation in Latvia which would allow us to do 
nothing," Jurijs Spiridonovs, a senior official at Latvia's 
energy ministry told Reuters. 
    The government has already sent a bill to parliament calling 
for the market to be opened from April 2017, when a 
privatisation agreement of its national utility Latvijas Gaze 
 GZE1R.RI  expires.  
    Lithuania, which opened an LNG import terminal last year and 
started importing super-cooled gas from Norway, called on Latvia 
to speed up the liberalisation. 
    Latvijas Gaze shareholders, which include Germany's E.ON 
 EONGn.DE , Russia's Gazprom  GAZP.MM  and gas trader Itera 
Latvija, have opposed an early market opening, also arguing that 
the country had an exemption from the EU market rules. 
    While Lithuania and Estonia replaced about 20 percent of 
Russian pipeline gas imports with alternative supplies via the 
LNG terminal, Latvia is still fully dependent on Russian gas. 
 
 (Reporting Gederts Gelzis, additional reporting by Andrius 
Sytas in Vilnius, writing by Nerijus Adomaitis; Editing by Greg 
Mahlich and David Evans) 
 ((nerijus.adomaitis@thomsonreuters.com; +47 9027 6699; Reuters 
Messaging: nerijus.adomaitis.thomsonreuters@reuters.net)) 
 
Keywords: LATVIA GAS/