Energy, EU – Baltic States, Gas, Investments, Latvia, Legislation, Technology, USA

Andris Berzins in the Houston Technology Center. Photo: president.lv

The president's visit on Monday began with the Houston Technology Center, where state-of-the-art technology in shale gas and oil fields exploration, and energy extraction are developed, tested and manufactured. After visiting the center, the first part of an hour long round table discussion followed, during which the Latvian president introduced American entrepreneurs with the current situation in the energy sector in Latvia and in the region.

Recognizing that dependence on a single gas supplier in the Baltic region is at 100 percent at the moment, the president of Latvia drew the attention of the potential investors to the current situation at Latvijas Gaze, which is undergoing the process of shareholder change, and that the issue regarding a site where a regional LNG terminal, supported by the European Commission, would be constructed, was not solved yet. Berzins admitted that development of regional projects is very significant for Latvia, and that the regional LNG terminal will have great potential for cooperation with LNG suppliers from the U.S. in the future. “Latvia has a number of advantages regarding construction of the terminal: both underground gas storage facilities and the geographical location of the country,” the Latvian president added.

At the same time, Berzins also stressed the advantages of the Latvian gas sector in terms of gas storage, by informing them about Incukalns underground gas storage facility and the opportunities it already provides not only for Latvia, but also for the whole region. He said that in the wintertime, the Incukalns facility ensures the Latvian domestic demand for gas in full, and supplies gas to customers in the Baltic States, north-west Russia, and Kaliningrad. During the conversation, the American entrepreneurs recognized repeatedly that efficient use of gas storage potential was crucial for improving energy security in Europe, and Latvia had very good options in that respect.

“Now is the right time is to activate all available resources in order to prevent instability. We need independent and powerful investors for a stable long-term operation not only in Latvia, but also in the region,” emphasized Berzins, and added that one of the existing shareholders of Latvijas Gaze – E.ON Ruhrgas International, has decided to sell their shares in the Latvian gas supply company. At the same time, Berzins stressed that Latvijas Gaze is in a good economic situation and this is an important argument to attract those investors, who have a lot of experience and long-term perspectives for their business in Europe.

“You are looking in the right direction,” said the industry representatives, having evaluated the Latvian position, and they supplemented that gas production and transportation companies in the United States were already reviewing opportunities to locate regional cooperation centers in Europe, where Latvia has several equitable advantages.

During the conversation, the forthcoming liberalization of the gas market was mentioned as an important factor for future development of the Latvian gas market, which would be implemented from April 2017, and that this in reality would mean partition of transmission system operators and distribution system operators, which would significantly influence attraction of investors as well.

Expanding on the information provided about Latvia, Berzins stressed that solutions to the challenges of energy security in Europe would be prioritized also during the Presidency of Latvia of the Council of the European Union in the first half of 2015.

The second part of the discussion was devoted to exploration and production opportunities in Latvia. Although a comprehensive study with respect to Latvia and potential deposits of shale gas has already been carried out, representatives of the American gas industry stressed that it should not be taken as a fact by any means that such deposits could not exist. Thanks to the “shale gas revolution”, the U.S. has become the largest natural gas producer in the world in recent years. The United States is also planning to develop LNG export capacity in the upcoming years. The United States Congress also intends on deciding on exports of liquefied gas to Europe in the nearest future.

While in Houston, the President Berzins also met with the local Latvian community, U.S. Congressman Ted Poe, and representatives of the local government.