State buys shares of important gas storage and transmission utility

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The Latvian state has bought shares at the gas transmission and storage company, Conexus Baltic Grid, which operates the Inčukalns natural gas storage facility, reported Latvian Radio on December 19.

The Economics Ministry said that on December 15 the state-owned Augstsprieguma tīkls utility inked an agreement to buy 18.31% of the Conexus Baltic Grid shares from Germany's Uniper Ruhrgas International.

Details about the deal remain confidential. Talks with Gazprom and Itera Latvia, which own most of the shares at Conexus Baltic Grid, are still ongoing.

Furthermore the ministry said that Latvia wants to become the owner of the gas storage facility at Inčukalns to prevent any obstacles to a united Baltic gas market.

"In buying shares of the gas storage operator of the Inčukalns underground storage facility, the state plans to move towards setting up a common regional market between the Baltics and Finland by 2020," the ministry said.

As previously reported, Conexus Baltic Grid was founded late last year to take over natural gas storage and transmission functions from the giant gas utility Latvijas Gaze. The company’s share capital is 39 million euros.

Latvian commercial TV3 channel reported earlier that the value of Conexus Baltic Grid shares might be 200 million euros.

The largest shareholders of Conexus Baltic Grid are Russian Gazprom (34.1%), Marguerite Fund (29.1%), state-owned Augstsprieguma tīkls (18.3%) and Itera Latvija (16%) or the same as Latvijas Gaze shareholders.

But the shareholders, with the exception of financial investor Marguerite Fund, have to dispose of their shares in Conexus Baltic Grid by the end of 2017 so that the new shareholders would not be related to Latvijas Gaze.

With the opening of the Latvian gas market on April 3, the amendments to the Energy Law giving the Latvian state the right of first refusal in respect to purchase of shares in Conexus Baltic Grid took effect.

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