On Wednesday, 5 March, the Economic, Agricultural, Environmental and Regional Policy Committee of the Saeima considered amendments to the Energy Law submitted for the third reading. According to the amendments, the Latvian gas market for individual consumers will be opened not earlier than April 2017. These amendments are scheduled to be considered in the final reading at the plenary sitting of 13 March.

“Starting from this year until 2017, relevant laws and regulations will be gradually implemented to ensure Latvia’s energy independence. It is important to make timely legislative adjustments to ensure that all the prerequisites for opening the gas market and entry of new market players are in place by the termination of the privatisation agreement of the national gas company Latvijas Gāze. Currently, we are focusing on bringing the wording of the Energy Law in line with the requirements of the European Union and the relevant directive,” said Jānis Ozoliņš, Chairman of the Committee.

The amendments provide for a gradual liberalisation of the gas market to be implemented in several stages starting from 4 April 2014. The first stage will involve dividing the accounting system of Latvijas Gāze by types of activity - management of gas mains, storage and sale. Furthermore, the gas system operator will be obligated to ensure equal and open access to infrastructure for market players willing to provide transmission, distribution and storage of natural gas or liquefied natural gas services.

Company Latvijas Gāze will be divided when Latvian natural gas system is directly interconnected with a natural gas system of another European Union member state - except Estonia, Lithuania and Finland, when it becomes a part of an interconnected natural gas system or when the share of natural gas supplied by the dominant provider drops below 75 per cent; however, the deadline for this process is scheduled for 3 April 2017.

The amendments also prohibit cross-subsidising in the gas supply sector; that is, gas supply operators will be prohibited from transferring costs or other liabilities between the production and procurement of natural gas, the provision of liquefied natural gas services, storage, sale, transmission and distribution, or any other commercial activity. 

Moreover, a new chapter will be introduced in the Energy Law authorising the Public Utilities Commission to impose penalties on gas system operators that fail to comply with the requirements of the Law, such as rendering services without a license.  

Currently, the joint stock company Latvijas Gāze is the only operator in Latvian gas market that procures, stores, transmits, distributes and sells natural gas. Latvia’s natural gas supply system has connections only with similar systems in Lithuania and Estonia, and natural gas is supplied exclusively from Russia. The authors of the amendments from the Ministry of Economics had previously indicated that according to the applicable EU directive, Latvia will lose its status as an emerging gas market on 4 April 2014.

Saeima Press Service