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Itera aims for controlling stake in gas utility

  • 2001-08-30
  • Ilze Arklina
RIGA - As the Russian-owned gas company Itera Latvija and Russian gas giant Gazprom vie for control of Latvia's gas monopoly Latvijas Gaze, commentators say they will pay a high price for the 3 percent of state-owned shares being sold on Aug. 31.

Itera and Gazprom already control some 47 percent of shares in the utility, while the Latvian state will be left with 3 percent after this sale - until that too is auctioned. Ervins Jonass, a senior analyst at Latvijas Krajbanka bank, said this months' price may be well above the highest price - 12.51 lats ($20) - reached by shares on the Riga bourse. But the final 3 percent may go for much less.

The last ownership shake-up occurred when the Finnish energy company Fortum sold its 2.01 percent of Latvijas Gaze shares on the Riga Stock Exchange on Aug. 17 for 11.80 lats per share. The buyer has not been announced but is thought to be Itera.

Although Fortum aims to dominate the gas market around the Baltic rim, the Latvian part of the jigsaw has not fallen into place. It has therefore turned its attention to companies elsewhere in the region, say company insiders.

The Aug. 17 price was lower than at the time of the auction of a 2 percent in July, when the price was 12.51 lats and most shares were bought by Itera's Latvian subsidiary Itera Latvia.

By Aug. 21, with the Latvian oil transit company Ventspils Nafta thought to have been the only interested buyer, the price had plummeted to 5.83 lats per share. Unofficial information showed the auctioned shares were purchased by Itera, German Ruhrgas and Ventspils Nafta.

But as Aug. 31 approaches the bidders are back and prices are up. Shares were being traded at 8.51 lats per share on Aug. 24 and accounted for 99.6 percent of stock market turnover.

Itera and Gazprom are thought to want control of Latvijas Gaze's natural gas storage facility in Incukalns. Unique in Russia and Europe, it mainly supplies consumers in Latvia, Estonia and Russia. They may also create a new storage space for supplying Western European markets in winter.

The company's largest shareholders are currently Gazprom, Germany's Ruhrgas and E.O.N. Energie, as well as Itera Latvija.