RIGA - Itera Latvija, a shareholder of Latvijas Gaze, is ready to sell 9 percent in the gas utility to Gazprom, Russia's gas monopoly, on condition that the latter guarantee long-term supplies to Latvia, Itera Latvija head Juris Savickis said last week.
Savickis said the situation on Latvia's gas market would be more secure if there was a long-term gas supply contract. Currently, it is necessary to hold talks on gas supplies every year.
Savickis said he would want to close the long-term contract for 15 years.
Last month Lithuania finalized a 10-year contract with Gazprom on the supply of natural gas, which local officials hailed as a guarantee for the country's long-term energy stability.
He did, however, confirm that Gazprom's board was considering buying the 9 percent stake in Latvijas Gaze, though not decision has been made.
The Interfax news agency reported last week that Gazprom's council of directors would discuss the issue in the near future.
Gazprom currently holds 25 percent plus one share in Latvijas Gaze, Germany's Ruhrgas and E.ON Energie hold 48 percent combined, while Itera Latvija has 25 percent plus 701 shares. Another 2.9 percent belongs to small shareholders, and the Latvian state owns 117 shares.
Savickis admitted there could be difficulties in coming up with a deal. If, for instance, Itera were to sign a long-term deal with Gazprom, other independent suppliers would also fight for similar agreements.
He pointed out that Gazprom owns the pipeline through which gas is supplied to Latvia, which allows it the luxury of choosing who it wants to work with.
Also, Savickis said the European Union has issued Latvia and other states recommendations according to which it would be best to diversity gas supplies so that no more than 30 percent of the required gas volume came from one source. In Latvia's situation, Savickis said, the situation was practically impossible since any alternative source of gas - e.g., from Norway - were too far away.
Last week the Latvian National Energy Confederation announced that in order to comply with EU requirements in restricting the use of sulfurous fuel oil and switching to natural gas, the country would need 40 million lats (60.4 million euros).
