Latvia opens the way for companies to buy gas from abroad

By bne IntelliNews February 9, 2016

Latvia has adopted new rule on gas trading, allowing companies to use the grid to secure supplies from abroad, the government announced on February 9.

The move is the latest salvo in the ongoing fight between Riga and Latvijas Gaze (LG), the country's Russia-controlled monopolist, which is pushing to delay unbundling, due in 2017.

According to the regulations adopted by the government, LG will now be obliged to ship gas purchased overseas to major Latvian consumers. The monopolist has long fought third party access to the grid, seeking legal action against the gas market regulator to strike down its move to grant access in November. LG has also consistently denied requests by companies to access the grid.

LG’s resolve in opposing the EU regulations may have been weakened somewhat recently, after an EU-backed investment fund Marguerite bought nearly 30% stake in the monopolist in late January. However, Russian shareholders still retain control.

Should LG and its powerful lobbyists fail to derail the new legislation, it would represent another crack in Gazprom’s hold over the Baltic states, a market it entirely dominated until last year. Estonia and Lithuania have pushed the Russian gas giant out of their networks, while LG controls the only underground storage in the region. Lithuania said this week that it expects Norway will become the country’s top gas supplier during 2016.

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