RIGA - Latvijas Gaze energy company has approached the Financial and Capital Market Commission (FCMC) with a request for a special permit for changes in the procedure of settlements with Russian natural gas giant Gazprom, Latvijas Gaze CEO Aigars Kalvitis said in an announcement to Nasdaq Riga on Thursday.
The head of the Latvian gas utility indicates that Latvijas Gaze currently has sufficient natural gas reserves to afford waiting for a more commercially attractive natural gas price. As soon as the natural gas market situation allows, Latvijas Gaze will resume buying natural gas.
Kalvitis notes that Latvijas Gaze has a long-term agreement with Gazprom on natural gas supplies in 2000-2030. So far, as stipulated by the agreement, payments for supplies have been made in the euro currency.
On March 31, Russian President Vladimir Putin signed a decree obliging countries labelled by Russia as "unfriendly" to pay for Russian gas imports in rubles as of Friday, April 1. Western countries indicated that such a requirement is a breach of the existing contracts and that they have no intention of paying for Russian gas in rubles.
Latvijas Gaze has not made any natural gas purchases from Gazprom since the introduction of the changes. There are both political and commercial reasons to the decision of not purchasing natural gas.
The stance of the European Commission and Latvia regarding the changes in the procedure of settlements is still not clear, and the natural gas market price is economically uncompetitive and excessive, Kalvitis says in the statement to the stock exchange.
The Saeima on Thursday approved amendments to the Energy Law banning Russian gas imports, but it is still not clear when exactly the ban might take effect. The government has said that the ban might be enacted as of 2023. It is expected that the issue will be decided during the third and final reading of the draft legislation in the Saeima.