Gazprom Auctions Latvian Grid Stake

Russian gas company Gazprom has announced an auction of its 34.1% stake in Latvian natural gas transmission and storage operator Conexus Baltic Grid (Conexus). Gazprom said it would happen December 30, the day before the deadline for resolving Conexus' certification issues as an unbundled system operator.

Gazprom has to dispose of its stake because the Latvian regulator, Public Utilities Commission (PUC),  has certified the gas transmission and storage operator on two conditions that have to be met by the end of the year.

One of the conditions stipulates that the management of the Incukalns underground storage facility is the responsibility of a company with no links to Gazprom and related companies.

The second condition is that Conexus ensures that there is no conflict of interest between the Luxembourg funds Marguerite Gas I and Marguerite Gas II, which, like Gazprom, own shares in both Conexus and the supply company Latvijas Gaze. However, the stake in Conexus has been sold to a Japanese infrastructure investment fund.

The starting price will be €79mn ($87mn), while the minimum price is set at €70mn. Bids are accepted by December 26, but the auction will be held on December 30 on Gazprom's electronic trade platform.

Conexus Baltic Grid, which has taken over natural gas storage and transmission functions from Latvijas Gaze, was established on December 22, 2016. Conexus is Latvia’s natural gas transmission and storage operator managing the Underground Gas Storage facility in Incukalns and the gas transmission system connecting the Latvian gas market with Lithuania, Estonia and the northwestern region of Russia.

Conexus belongs to Augstsprieguma Tikls (34.36%), Gazprom (34.1%) and Marguerite Gas I (29.06%).