No special treatment for gas company warns PM

There will be no concessions regarding natural gas market liberalization and the planned 'unbundling' of the Latvijas Gaze natural gas utility, Latvian Prime Minister Maris Kucinskis told the press Tuesday after a meeting with Latvijas Gaze CEO Aigars Kalvitis.

The prime minister said the meeting had been organized at his initiative, and Kalvitis - himself a former prime minister - had informed him about the unbundling process which, in Kalvitis’ words, proceeded in accordance with the schedule.

Kucinskis said it was important to begin talks with Latvijas Gaze in good time to avoid the situation in which the government would have to make decisions at the last moment about the possible acquisition of shares in the new natural gas transmission company that will be created after the split-up of Latvijas Gaze.

In opinion of the prime minister, the government should retain influence in the new company but this would mean large investments. He said he supported the opinion of Economics Minister Arvils Aseradens (Unity), that the Latvian state should team up with a partner in the acquisition but take control over more than 50 percent of shares in the new gas transmission company.

Kalvitis said the reorganization at Latvijas Gaze was already under way and the shareholders were expected to approve the reorganization prospectus at a meeting on September 2 this year. He still insists that the government is rushing natural gas market reforms that would break his company's monopoly.

"LG is carrying out the process under a tight schedule and hopes for success,” the gas company’s CEO said.

The Latvian parliament in February this year passed amendments to the Energy Law in the final reading to support liberalization of the gas market and rules on breaking up Latvijas Gaze. Under the legislative amendments, Latvijas Gaze has to be split up in two companies -- one for operating the gas transmission and storage system and the other for dealing with natural gas distribution and sale -- by April 3, 2017. The process of separating the natural gas transmission and storage operator from Latvijas Gaze should be completed by December 31, 2017. That means that the operator will be a company whose owners will not be affiliated with Latvijas Gaze or its shareholders in any way.

Economics Minister Arvils Aseradens said earlier that Marguerite Fund, one of Latvijas Gaze shareholders, had expressed readiness to become the Latvian government's partner in buying shares in the new gas transmission company. „Knowing this, it will be easier for Latvia to get involved in the potential acquisition process because the government’s costs and risks will reduce,” the minister said.

The Economics Ministry will hire an advisor regarding acquisition of shares in the new gas transmission company.

Russia's Gazprom owns 34 percent of Latvijas Gaze shares, Marguerite Fund has 28.97 percent, Uniper Ruhrgas International GmbH 18.26 percent, Itera Latvija 16 percent, and minority shareholders own 2.8 percent of Latvijas Gaze shares.

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