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    Gazprom Divests from Latvian TSO


The Latvian state now has majority control over Conexus Baltic Grid.

by: Joseph Murphy

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Gazprom Divests from Latvian TSO

Russia's Gazprom has sold its 34.1% stake in Latvian natural gas transmission and storage operator Conexus Baltic Grid to local state-owned Augstsprieguma Tikls, Latvia's economy ministry reported on July 21. Augstsprieguma Tikls now has majority control of Conexus, with a 68.5% interest.

Conexus was spun off from Latvia gas supply firm Latvijas Gaze (LG) in December 2016. LG's shareholders, which include Gazprom, Russia's Itera Latvija, the EU's Marguerite fund and Germany's Uniper Ruhrgas International, automatically assumed shares in Conexus. But they were required to sell these interests under EU unbundling rules, which prohibit gas suppliers from also owning transmission infrastructure.

Uniper Ruhrgas and Itera sold their shares to Augstsprieguma Tikls in 2017 and 2018 respectively, while Marguerite shed its 29% stake to Japan's Marubeni earlier this year.

Gazprom originally had until the end of 2017 to dispose of its stake, but repeatedly missed deadlines citing a lack of buyer interest. The Russian firm held an auction for the stake in December last year. Augstsprieguma Tikls did not disclose its purchase price, but the starting price for bids in Gazprom's tender was set at  €79mn ($87mn).

As an existing shareholder, Augstsprieguma Tikls had pre-emptive rights to Gazprom's position.

Conexus' prize asset is the 2.3bn m3/yr Incukalns understorage gas storage facility, the only gas reserve in the Baltic states.