Estonia to reform gas sector

The Estonian government said the unbundling will bring lower gas prices long-term. Photo by Teresa Aguilera.

TALLINN — With Lithuania’s example in mind, the Estonian government announced on Wednesday that it plans to unbundle national energy company Eesti Gaas to break Gazprom’s hold over the country’s gas market.

The ruling coalition met Wednesday and agreed to start developing a bill in September that would split the company’s transmission and sales divisions into separate companies. Eesti Gaas, which has a monopoly on natural gas transmission and sales in Estonia, is 37 percent owned by Russian gas giant Gazprom. E.ON Ruhrgas holds 33.6 percent of the shares while 17.7 percent is owned by Finnish FortumHeat and Gas OY and 9.8 percent by Itera Latvija.

Kristen Michal, Reform Party secretary said at a press conference that this step is economically important for Estonia by making possible to import gas from outside Gazprom. Michal predicted that natural gas prices will decrease once this happens, helping the national economy.

“If the owners are different then there can be competition which gives a chance that the prices will be lower to the consumers,” Michal said. “Today the price gets higher and there are no real alternatives.”

The move adheres to European Union energy directives and follows Lithuania’s footsteps in splitting its national gas company Lietuvos Dujos, which Gazprom and E.ON Ruhrgas also own a large shares of. Transmission, production and infrastructure would be separated under the plan.

“Every thoughtful and effective step to curb monopolies is justified as the consumers are unprotected in the monopoly market,” Ken-Marti Vaher, secretary of the Union Pro Patria and Res Publica told the media.

Vaher said that “Gazprom, the main owner of the gas network is doing nothing to enable access to other gas networks, also to other suppliers.”

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