Latvia and Lithuania to work on developing a gas market

Latvijas Gaze AS

16/10/2015 17:43

RIGA, Oct 16 (Reuters) - Latvia and Lithuania have agreed to 
work on developing a gas market, committing to provide 
participants with access to infrastructure, a memorandum signed 
on Friday showed. 
    Lithuania opened a liquefied natural gas (LNG) import 
terminal in 2014 and started exporting natural gas to 
neighbouring Estonia earlier this year, breaking the supply 
monopoly of Russia's Gazprom  GAZP.MM . 
    "By signing the memorandum of understanding, both the 
countries commit to work together to encourage the entry of new 
gas suppliers in the market," Latvia's Economy Minister Dana 
Reizniece-Ozola said. 
    "It is important for Latvia to diversify its sources of 
natural gas supplies while working on liberalisation of the gas 
market of Latvia," she added. 
    The two countries haven't set a deadline for the market to 
be created, but said the agreement covered 2015-2017. 
    Latvian gas utility Latvijas Gaze  GZE1R.RI , 34 percent 
owned by Gazprom, is the sole supplier in Latvia, and says it 
has a sales monopoly until April 2017 under a privatisation 
agreement signed in 2007. 
    The government has said it wants to split Latvijas Gaze, 
which also operates the Incukalns underground gas storage, one 
of the biggest in Europe, to boost competition.  ID:nL5N11G4D9  
    Lithuanian Energy Minister Rokas Masiulis told Reuters in an 
interview on Wednesday his country was in talks with U.S. LNG 
company Cheniere Energy Inc  LNG.A  over potential imports. 
 ID:nL8N12E438  
    Lithuanian LNG importer Litgas has a five-year contract with 
Norway's Statoil  STL.OL  to buy 540 million cubic metres of gas 
per year. 
    Masiulis said on Friday industrial buyers in Lithuania were 
paying 15 percent less than those in Latvia. 
    Latvijas Gaze said the price in Lithuania had fallen due to 
discounts provided by Gazprom, while gas from the terminal was 
more expensive.  
    Litgas has said it was selling gas imported via the LNG 
terminal at an average price of 29.4 euros per megawatt-hour 
(MWh) this year.  
    Latvenergo, Latvia's biggest power producer, has said it 
wanted to test gas imports from Lithuania in December, but still 
needs Latvijas Gaze to agree to transport it.  
    Latvijas Gaze has previously vowed to defend its monopoly, 
saying it could be penalized by Gazprom for taking less gas than 
agreed.  ID:nL5N11O1AG  
 
 (Reporting by Gederts Gelzis; Editing by Nerijus Adomaitis and 
Mark Potter) 
 ((nerijus.adomaitis@thomsonreuters.com; +47 9027 6699; Reuters 
Messaging: nerijus.adomaitis.thomsonreuters@reuters.net)) 
 
Keywords: BALTIC GAS/