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Shareholders vote to split up Latvian natural gas monopoly

Xinhua, September 2, 2016 Adjust font size:

Shareholders of Latvian natural gas monopoly Latvijas Gaze decided at an emergency meeting on Friday to approve the company's restructuring plan, Latvian public radio reported.

That provides for splitting the company up and turning over its gas transmission assets and storage business to Conexus Baltic Grid, a new company that would be established as a result of the unbundling.

Latvijas Gaze has to be split up in order to ensure third-party access to Latvia's gas infrastructure after the Latvian gas market opens up to free competition in line with the European Union (EU) requirements.

The independent operator in charge of gas transmission and storage has to be created by April 2017.

The Latvijas Gaze shareholders who turned up at Friday's shareholder meeting hold 97 percent of the company's shares. The restructuring plan was approved by 99.98 percent of votes to 0.01 percent.

Discussions at the meeting mostly concerned the interests of the gas company's minority shareholders, while less attention was paid to the forthcoming gas market liberalization.

It has yet to be decided whether the new gas transmission and storage operator will be a public or nonpublic stock company. This decision might be taken in December when Conexus Baltic Grid is to be established. It is thought that listing the company's shares would ensure greater transparency and possibilities for public participation in the company's operations.

It is planned that Conexus Baltic Grid will operate gas transmission pipelines and an underground gas storage facility, situated in Incukalns, outside the Latvian capital city Riga. Latvijas Gaze, meanwhile, will continue operations as a company selling natural gas.

With a 34 percent stake, Russian gas giant Gazprom is currently the largest Latvijas Gaze shareholder. Marguerite Fund owns 28.97 percent, Germany's Uniper Ruhrgas GmbH 18.26 percent, and Itera Latvija 16 percent in Latvijas Gaze, while 2.8 percent of the company's shares belong to small shareholders. Endit