Baltic States – CIS, Energy, Gas, Latvia, Legislation

"The market will change significantly after April 3, 2017, and Latvijas Gaze will have all the chances to become the largest gas supplier in the Baltics," he said.

Answering the question about a liquefied natural gas (LNG) terminal built in Klaipeda, Lithuania, the CEO of Latvijas Gaze said he did not consider Lithuanians as rivals and pointed out presence of political motives in development of the natural gas market in Lithuania.

"The average gas price in Lithuania is 20% higher than in Latvia," Kalvitis said, noting that, because of the price difference, Lithuanians could not be perceived as competition.

He said that Lithuania's agreement with Russia's Gazprom about natural gas supply would expire on December 31, 2015, and there was no certainty about a new gas supply agreement.

In October this year, the Latvian parliament approved in the first reading amendments to the Energy Law, which envisage gradually opening up the gas market until April 2017, as well as the break-up of Latvijas Gaze.

According to the bill, the vertically-integrated joint-stock company Latvijas Gaze will have to become two legally-independent companies by April 3, 2017, of which one will be in charge of the gas transmission and storage system, and the other will be responsible for natural gas distribution and sale.

The amendments stipulate that the process of separating the natural gas transmission and storage operator from Latvijas Gaze should be completed by December 31, 2017. That means that the operator will be a company whose owners will not be affiliated with Latvijas Gaze or the company's shareholders in any way.