Latvia's Gas Utility Sales Volumes Fall in 2014

Latvia's gas utility Latvijas Gaze sold 10.9 percent less natural gas imported from Russia in 2014 than a year before, the company said on Wednesday.

 

Sales fell to 1.3 billion cubic metres (bcm) due to warmer weather and as more gas was switched for woodchips for heating, the company said when reporting its full-year results.

 

Germany's E.ON wants to sell its 47.2 percent stake in the Latvian utility, which is 34 percent owned by Russia's Gazprom. The Russian firm is the sole supplier of gas to the Baltic country.

 

Latvijas Gaze Chief Executive Adrians Davis confirmed on Wednesday that European infrastructure fund Marguerite was negotiating with E.ON.

 

"There is a buyer - Marguerite. The buying and selling process is taking place at the moment ... It's not an easy process," he told an energy conference in Latvia.

 

The Luxembourg-headquartered Marguerite fund, which is backed by EU financial institutions, declined to comment.

 

There was 1.9 bcm of natural gas injected into Latvia's underground gas storage site at Incukalns as of end-October 2014, Latvijas Gaze said.

 

Natural gas, delivered by pipeline from Russia, is injected into storage over summer and withdrawn in winter, when consumption rises.

 

The storage site, with capacity of 2.3 bcm, is one of the largest in Europe. It supplies gas in winter to Latvia, Estonia and northwestern Russia.

 

Lavijas Gaze has a monopoly to sell natural gas in Latvia, but Gazprom faces increasing competition from liquefied natural gas (LNG) imports in Baltic neighbours Lithuania and Estonia.

 

Latvia's government plans to liberalise the gas market from 2017.

 

Lithuania opened a floating LNG import terminal at the end of last year, and plans to buy about 0.5 bcm per year of natural gas delivered by tanker from Norway.

 

Lithuanian LNG importer Litgas has also signed several deals to supply gas via Latvia to Estonia.