The open natural gas market has increased security of supply, energy independence and competition among merchants


On April 3, 2018, it has been a year since the natural gas market in Latvia has been open for free competition. “Looking at the development of the Latvian natural gas market in the first year, I believe that the most significant marker of success is the wholesale gas price of natural gas. The most recent European Commission statistics show that Latvia has closed the previous year with one of the lowest natural gas wholesale prices in the European Union - EUR 17.11 per megawatt, which is the lowest price in the entire Baltic Sea Region and lower than in one of the Europe's most active natural gas markets - Germany.

We are also pleased to conclude that the preconditions for competition between merchants have been created, and the security of natural gas supply and energy independence have increased, while strengthening the European Union's single natural gas market. In order to maintain the competitiveness of natural gas, we need to consistently move towards a single Baltic and Finnish natural gas market,” emphasizes Arvils Ašeradens, Deputy Prime Minister and Minister of Economy.

During a year, the competition between natural gas merchants has risen significantly reaching up to 35 merchants. Anyone interested may get acquainted with all the natural gas merchants on the website of the Public Utilities Commission.

Likewise, the natural gas transmission and storage have been separated from the historical natural gas monopoly AS Latvijas Gāze (JSC) – these functions are currently performed by AS Conexus Baltic Grid (JSC), while the distribution system is currently managed by AS Gaso (JSC).

The government has made a decision and AS Augstsprieguma tīkls (JSC) has acquired 34.36% of shares in the Inčukalns underground gas storage operator Conexus Baltic Grid. Acquisition of Conexus shares is an important matter of the national energy independence and security. At the same time, by the acquisition of the Inčukalns underground gas storage operator's shares, the country's aim is to continue to move towards establishment of a Baltic and Finnish regional gas market by 2020.

“In parallel, since year 2016, we have been actively working to establish a Baltic regional gas market by 2020, which will provide us with even greater security of supply and energy independence in the future. Moving towards this goal, the main tasks this year are to reach an agreement on a common natural gas tariff system, conditions for the use of regional infrastructure and the reduction of overall costs. Meanwhile, during the next three years, active work will be carried out in terms of on infrastructure development,” emphasizes the Minister of Economics.

In the next three years, the work on the Baltic-Finland interconnection project will be completed, thereby establishing an interconnection between Estonia and Finland, connecting the Baltic and European networks, establishing interconnections between Lithuania and Poland, and strengthening the regional role of Inčukalns underground gas storage.

It is well known that, in accordance with the Energy Law, on April 3, 2017, the natural gas market in Latvia was opened allowing free competition and merchants and other legal entities became active players in the market. In turn, household customers were expected to have a gradual market opening – household users who did not want to change the merchant still continue to receive natural gas from an existing merchant at a fixed (regulated) price, thus becoming captive consumers. The obligation to deliver natural gas to the captive consumers at a regulated price is imposed on the public merchant AS Latvijas Gāze (JSC) until 2019.

Last update:    01-02-2019