Utility tipping Baltic gas field in own favor?

Take note – story published 9 years ago

Since the launch of the liquefied natural gas terminal in Klaipeda, gas from Lithuania can now technically be supplied to Latvia, however the Latvian gas utility Latvijas Gaze has put up new rules which limit gas supplies while precluding consumers in Latvia from using gas from Lithuania, Latvian Public Television (LTV) investigative news program De facto reported Sunday.

The limited throughput of the pipeline from Lithuania makes it impossible to ship large amounts of Lithuanian gas to Latvia. Moreover, the price of this gas is not very attractive. Still, there is an interest on the market. A year ago, the Klaipeda terminal's operator contracted with Latvijas Gaze on storage at the Inčukalns underground storage facility. This year, an agreement was signed on gas transit to customers in Estonia.

In order to use Latvian pipelines, an agreement with Latvijas Gaze must be negotiated. The company was supposed to draw up regulations on usage of its pipelines, which would provide a clear and level playing field for all users. The gas utility firm submitted its regulations to the Public Utilities Commission, which is still in the process of review.

"The regulator repeatedly requested that the regulations be changed, however not all of these recommendations were taken into consideration," Public Utilities Commission's board member Rolands Irklis told De facto.

The regulator has received complaints from all three Baltic States claiming that Latvijas Gaze is maneuvering to control access to its pipelines and the Incukalns facility so as to prioritize local consumers, in other words - to the company itself.

The Lithuanian Energy Ministry is concerned that such regulations would discriminate against consumers and traders outside Latvia. Meanwhile, the Estonian gas network operator believes that all gas market players, including Latvijas Gaze, should be treated on an equal basis.

Electric power utility Latvenergo, which is mulling buying gas supplies for its needs from Klaipeda, says that the regulations proposed by Latvijas Gaze in current draft will effectively make supplying gas from the Klaipeda terminal to power facilities in Riga impossible, and warns that the European Commission may open an infringement procedure against Latvia if it goes through.

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