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De facto: government refuses to reveal the costs of Inčukalns gas storage facility’s shares

Twenty years after the privatization of Inčukalns underground gas storage facility by Latvijas Gāze the state controls it once again. The government has paid a so far unknown amount of money for more than one-third of shares, as reported by De Facto programme of LTV.

The structure of Conexus Baltic Grid was initially similar to Latvijas Gāze – Russian Gazprom, international fund Marguerite, German Uniper, and Itera Latvija, owned by Russian Rosneft and Juris Savickis, De Facto reminds.

LTV also reports that Latvian government bought shares from Uniper and Itera (34.36% together) through Augstsprieguma tīkls in December 2017.

«Amendments approved to the Energy Law one and a half years ago prohibit companies associated with gas harvest and trade to participate in gas storage and transmission. This is why no Gazprom representatives were invited to an extraordinary meeting of Conexus Baltic Grid last week. This allowed the state to elect four out of seven council members,» De Facto reports.

Latvian Economy Minister Arvils Ašeradens explains that the government decided in favour of buying Conexus shares to ensure smooth creation of a gas market in Baltic States.

Augstsprieguma tīkls also admits – formation of the market would be impeded if previous shareholders retained control over the company.

Multiple energy experts had previously expressed their doubts about the necessity for the state to become a shareholder. Experts added that successful accomplishment of goals can be secured by a powerful market regulator.

The government is committed to buying more than 50% of shares, by acquiring Gazprom shares as well. Opinions have been voiced that the deal is not over yet, because this matter has yet to navigate bureaucratic corridors of such a large organization like Gazprom. On top of that, it is currently a holiday period in Russia. The minister says talks are currently in an active phase, the programme notes.

The cost of the purchase of shares is kept secret. What is known for a fact is that Augstsprieguma tīkls borrowed money from the State Chancellery.

«It [the price] will be reported later. Talks are being performed with Gazprom at the moment. Previous purchases have all been confidential – it was detailed in the contracts,» says chairman of Augstspriegumu tīkls Varis Boks.

The minister claims that «it is clear that this information has to be made public. But at the moment the negotiations process continues. The government’s intention is acquiring the controlling package of shares. Because of that, it is in the interest of the deal for the price to remain undisclosed.»

De Facto notes that arguments regarding keeping the price secret from Gazprom do not hold water, because Itera Latvija’s largest owner Rosneft, like Gazprom, is owned by the Russian state.

The minister also refused to explain the government’s tactic behind even buying Itera shares, considering that acquisition of majority of shares would be possible through procurement of shares from Gazprom and Uniper.

Itera Latvija co-owner Juris Savicskis «is not particularly happy» that he had to sell shares. He also did not mention the price. The only thing he said that «it was very economically beneficial for Latvian state,» the programme reports.


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