RIGA, April 3 (Xinhua) -- The Latvian natural gas market opened up for free trade on Monday, ending the monopoly of Latvijas Gaze gas utility as required by EU regulations, local media reported.
The gas market's liberalization, however, is not expected to bring about sudden changes in gas supply conditions or price, Latvia's Dienas Bizness daily said.
The Latvian economics ministry noted that the opening of the gas market has attracted much stronger interest from potential suppliers than the electricity market, apparently because of its larger size, as Latvia's annual energy consumption includes around 14 terawatt-hours (TWh) of natural gas and 7.2 TWh of electric power.
A total of 15 energy companies from all three Baltic states -- Latvia, Lithuania and Estonia -- have registered as potential natural gas suppliers ready to compete for clients in Latvia.
Energy expert Reinis Aboltins said on Latvian public radio, however, that by 2030 gas consumption in Latvia was expected to drop by half.
Aboltins also indicated that Latvian gas consumers were fairly well prepared for the free gas market as the gas price had already been tied to global factors like prices of oil products and currency rates.
"The starting positions are rather similar for all gas suppliers because there are no gas production companies in the Baltic states and everything will depend on the wholesale gas buying strategy chosen by each supplier," said Janis Bethers, CEO of Enefit power utility.
In order to enable the gas market's planned liberalization, Latvijas Gaze natural gas monopoly has been split up by setting up Conexus Baltic Grid, a company in charge of gas transmission and storage operations in Latvia. This allows practically any supplier to access and use Latvia's gas pipelines.
Latvijas Gaze, meanwhile, will continue its operations as gas distributor and supplier to corporate consumers and households.
"Most importantly, it is necessary to make the largest gas supplier to the region, Russia's Gazprom, play by the same rules as any other company on the market," said Abolins.
The expert also predicted that the gas price might even continue to drop for some time, but that gas supply services were likely to rise in price soon. Enditem
