Eesti Gaas ponders expansion to twin towns on border

  • 2004-04-29
  • By TBT staff
TALLINN - The Estonian-Latvian twin towns of Valga and Valka may soon be hooked up not only by the common European market, but by Eesti Gaas' (Estonian Gas') network, if a joint project funded by the EU gets the green light.

Raul Kotov, sales director of Eesti Gaas, told the Eesti Paevaleht daily that the company was interested in supplying natural gas to both towns in cooperation with Latvijas Gaze, the Latvian gas company.
Eesti Gaas representatives met Valga and Valka town and county municipality officials last week to begin a study on local gas demand. The new meeting will take place in three to four months.
The Latvian gas company will carry out the same analysis on its side of the border.
According to Eesti Gaas, the feasibility of the project is being assessed. Whether or not the pipeline will be eventually built depends upon the expected demand of Valga consumers.
The city's county municipality officials said the project would rely on the EU cross-border cooperation program that requires participation of two nations in order to procure the necessary funds.
Municipal officials regard linking the town of Valga and the surrounding county to the gas network as a major step toward gaining investment in the region.
Valga and Valka used to comprise one town for several hundred years since inception in the 13th century. They were separated by a state border in 1920 after Estonia and Latvia proclaimed independence.
Today, about 22,000 people live in both towns, with about 15,000 on the Estonian side.
The nearest points to Valga in Estonia's southern gas supply network are in Varska, near the Estonian-Russian border, some 80 kilometers east of Valga, and in Karksi, some 50 kilometers west of the town.
Russia and the underground storage in Incukalns, Latvia, supply gas to 21 towns in Estonia. In Estonia, the number of gas network clients amounts to some 120,000 apartments and private houses, 900 businesses, 224 industrial consumers and dozens of heating companies. In 2002, about 742 million cubic meters of gas were consumed in Estonia.
Eesti Gaas, owned by Gazprom (37 percent), Ruhrgas (34 percent), Fortum Oil&Gas and minor shareholders, is the largest - but not the only - natural gas supplier in the country.
Shareholders last week endorsed the company's 2003 economic report along with the profit distribution proposal, which calls for the payment of 31 million kroons (2 million euros) in dividends. Shareholders will be paid a dividend equal to 20 percent of the share's face value, or 2 kroons per each B share, a company spokesperson told the Baltic News Service.