Estonia Advised to Nationalise Eesti Gaas
Estonia should nationalise natural gas company AS Eesti Gaas, a report from Finnish consultancy company Poeyry Oyj has said.
The report commissioned by transmission system operator Elering AS says that the move is necessary to further Estonia's gas interests.
"The development of the natural gas market and expansion of gas consumption will probably occur only if the transmission grid belongs to the Republic of Estonia," Bloomberg reports Poeyry Oyj as saying.
"The state can only ensure effective energy markets through two simultaneously functioning levers: working regulations and ownership of the system operator for the main grid."
The firm also recommended the splitting of sales and transmissions by 2015, as well as the construction of a liquefied natural gas (LNG) terminal.
"This (the LNG terminal) should result in a regional market and increased competition in Estonia, and should lessen the dominant position of one single market participant in the whole value chain of the local gas business," the report said.
The recommendations are likely to find support from Estonian ministers and domestic customers alike as Estonia's gas prices continue to rise.
Eesti Gaas, which is 37 per cent owned by Gazprom, currently acts as a monopoly in Estonia, despite political pressure and plans to divide the company's operations. Gazprom is also the sole supplier of Estonia's gas.
Earlier this month, the Estonian Ministry of Economic Affairs said grid operator, EG Võrguteenus, should be separated from Eesti Gaas. The measure is part of a drive to implement the EU's Third Energy Package, buoyed by an EU investigation into anti-competition by Gazprom.
An official from Eesti Gaas said that drastic measures were not necessary and that a restructure of the company was all that was needed to increase competitivity.
"Third parties would participate in the company's leadership," spokesperson for Eesti Gaas Raul Kotov said. "The company would not make its decisions based upon the wishes of Gazprom, but upon the company's development needs and the dynamic of the Estonian gas market."
Eesti Gaas today announced that it would be raising the price of gas to domestic customers by 15 per cent. The company blamed rising gas prices, partly caused by the Fukishima disaster and the Arab Spring protests, for the €0.40 (inc. VAT) increase per cubic metre.