EU-backed investment fund Marguerite has purchased a 28.97% stake in Latvian gas monopolist Latvijas Gaze (LG) from Uniper Ruhrgas International (former E.ON), LG announced on January 28.

The investment in Russian-controlled LG by an entity with ties to the European Investment Bank and state institutions from Germany, Poland, Spain and France is seen as a move intended to pressure the Latvian gas utility to conform to EU regulations. Latvia's powerful gas lobby is currently fighting to delay unbundling of the company, which is key to creating a wider Baltic gas market and reducing the region's dependence on Russian supplies.

The deal’s value was not disclosed. Based on the current price of LG shares on the Riga stock exchange, the acquisition would have cost Marguerite around €115mn. E.ON retains 18.26%. Gazprom remains LG’s largest shareholder with 34%, while Russian-controlled Itera Latvija holds 16%. The rest is held by small investors.

The stake, the last to be sold by the German company in the region, which previously had owned major stakes in all three of the Baltic region's monopolists alongside Gazprom, was earlier eyed by Riga. However, the government dropped out of the running in 2014, claiming it could not afford to buy.

LG's supply and transmission assets are set to be split when the 20-year guarantee of its monopoly status, granted during privatisation of the company, ends in 2017, although the plan is yet to be approved by parliament. That would open the way for Lithuania's LNG terminal, opened in January 2015, to supply the rest of the region through Latvia's network. In particular, LG's control of the region's only storage facility - Incukalns - is key for the struggling facility.

Local energy analysts noted last year to bne IntelliNews that Gazprom is keen to rally its local forces to try to derail the unbundling, which would mark the end of Gazprom’s dominance in the Baltic region. Should it go through, Latvia would join its neighbours Lithuania and Estonia, which already succeeded in wrestling control of their gas transmission networks from Moscow.

Brussels has also made ending the Baltic region's "energy island" status a priority, as it seeks to reduce Gazprom's influence. Marguerite's mandate is "to help realise investments in projects implementing key EU policies in the areas of climate change, energy security, and trans-European networks".

However, it's unclear why the fund bought did not buy the full stake from the German company, which was previously understood to be up for grabs. A representative refused to comment on the influence the newly acquired stake would give Marguerite.

Economy Minister Dana Reizniece-Ozola - who has led a push to ensure the unbundling happens on schedule this time - LG managed to get an earlier 2014 move to split it up postponed - said Marguerite's involvement will help Latvijas Gaze to expand Incukalns. LG has said it will not buy any gas from Lithuania while it retains its monopoly. The company currently sells only gas imported from Russia.

Energy analysts suggest to bne IntelliNews that the deal involves an agreement that the remaining stake held by E.ON will be purchased at a later date, likely by the Latvian government or investors close to it. Marguerite’s stake will not give it any blocking power at LG.

That suggests that the EU still faces a tough fight to help develop a regional gas market. While Gazprom and Itera are two separate entities, and no longer perceived to be as close as they once were, they still both represent Russian gas interests, and are expected to continue to resist the split of the company, the analysts point out.