Latvia advances plan to strip Gazprom of gas storage control

Latvijas Gaze AS

17/12/2015 16:34

RIGA, Dec 17 (Reuters) - Latvia's plan to win control of its 
underground gas storage facility from supplier Gazprom took a 
step forward on Thursday with the aim of making the Russian 
company sell its stake in the facility. 
    Latvia's parliament approved a second reading of a draft law 
to spin off the gas transportation and storage business from 
national gas utility Latvijas Gaze  GZE1R.RI  by April 2017. 
    Parliament is expected to hold the final vote on the bill in 
spring next year. 
    The draft bill proposes that the gas monopoly will have to 
be split by April 2017, and the gas storage operator has to be 
made independent from the current owners of Latvijas Gaze by the 
end of the same year, or Latvijas Gaze will face fines. 
    That would mean Gazprom having to sell its stake in the 
future operator of the 2.3 billion cubic metres Incukalns gas 
storage, Europe's one of the biggest.  
    It has now 34 percent stake in Latvijas Gaze. 
    Latvia's Economy Minister Dana Reizniece-Ozola told Reuters 
ahead of the vote that it would be the best outcome if the 
storage is acquired by the state, which can guarantee that all 
market participants have an equal access. 
    "That's why it's important to split the company and to have 
a different management, independent from the current (gas) 
seller," she said. 
    Gazprom Deputy Chief Executive Valery Golubev asked the 
Latvian government to postpone the deadline for selling stakes 
in the future storage operator during a meeting in Riga last 
week, Latvian officials said.  
    Latvijas Gaze has said that it held the gas sales monopoly 
in Latvia under the terms of a privatisation agreement from 
1997, and intended to defend it until the agreement expires in 
April 2017. 
    The European Commission said earlier in December Latvia must 
open its gas market to competition and to comply with EU rules 
now the country can access alternative supplies via a liquefied 
natural gas (LNG) terminal in neighbouring 
Lithuania. ID:nL8N13R3HT  
    Germany's E.ON  EONGn.DE , which has 47.2 percent in 
Latvijas Gaze, is seeking to sell its stake, Latvian officials 
have said. 
 
 (Reporting by Gederts Gelzis, writing by Nerijus Adomaitis. 
editing by William Hardy) 
 ((nerijus.adomaitis@thomsonreuters.com; +47 9027 6699; Reuters 
Messaging: nerijus.adomaitis.thomsonreuters@reuters.net)) 
 
Keywords: LATVIA GAZPROM/