Latvian regulator sues Latvijas Gaze for gas pipeline access

By bne IntelliNews March 17, 2016

Latvia's energy market regulator has launched an administrative case against Latvijas Gaze (LG) over refusal to allow third party access to the country's gas infrastructure, the Latvian Public Utilities Commission (SPKR) announced on March 17.

The case comes Riga pushes to enforce the unbundling of LG, which currently controls the entire Latvian gas market. The company, which is Russian controlled, has been fighting the effort for some years, but Latvia recently pushed through new legislation to force the split up of LG. Freeing Latvia's pipelines is key to creating a unified Baltic gas market.

The probe comes over LG's rejection of a request by energy company Latvenergo to use the grid to buy gas from neighbouring Lithuania, which is looking to find more markets for its LNG terminal launched at the start of the year. The regulator claims LG is breaking the Energy Law by denying access to grid. Predictably, LG rejects such interpretation.

LG insists the access of the infrastructure by third parties is not allowed under its monopoly status, which was granted as it was privatised in 1997. The monopoly is set to expire in April next year, at which point the recent legislation demands it must be unbundled.

LG and the powerful gas lobby in Latvia insist the deadline is too short and should be extended to 2019. It succeeded in blocking an earlier deadline in 2014. The Riga government appears, however, more dogged this time in its drive, and has won several significant court cases demanding LG open the gas pipelines.

LG is controlld by Russia, with gas giant Gazprom holding 34% and Itera Latvija - controlled by Rosneft - owning 16%. EU-backed investment fund Marguerite bought close to 30% earlier this year, while Uniper Ruhrgas (formerly E.ON) holds 18%.



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