Latvian PM candidate pledges to push unbundling of Latvijas Gaze

By bne IntelliNews January 19, 2016

The unbundling of the Latvian gas monopolist Latvijas Gaze (LG) will be carried out without delay, the nominee for the post of prime minister insisted on January 19.

The parliament is determined to push through the final regulations to implement the split up of the Russian-controlled gas monopolist, regardless of the process of forming new government, Marins Kucinskis told local media. The move, which the country's powerful gas lobby is busy trying to derail or delay, will not be left to the next administration, he told local media.

Latvia’s coalition government fell on December 7, when Laimdota Straujuma quit as PM of the coalition, having struggled to push through policies, including moves to unbundle the gas market. While the process of forming a new government has been protracted, Kucinskis said the coalition will be firm. The unbundling is a state priority, with or without the new government, he stated, according to LSM.

Kucinskis’ pledge will not go down well with LG. The company, which earlier managed to delay a move to split ownership of its supply and transmission activities, claims the 2017 deadline is too short. LG was granted a 20-year monopoly on the Latvian gas market in 1997, following privatisation.

Under the European Union’s regulations, the company will have to sell off its control of the countries gas grid and underground storage facility. Incukalns is a strategic lynchpin for development of a single Baltic gas market, which would dent Gazprom's ability to prolong its dominance. Lithuania and Estonia have taken control of their gas infrastructure already, and Vilnius is pushing to supply its neighbours via the LNG terminal it launched in January 2015.

LG is currently fighting efforts by the Latvian authorities to open the way for such alternative suppliers to Gazprom ahead of 2017.

 

 

 

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