The process of opening the natural gas market in Latvia was launched on 3 April 2017, when retail users became able to freely choose their natural gas trader, while continuing to buy it at a regulated price. Most households continued to buy natural gas from the incumbent Latvijas Gāze, controlled by Gazprom, at a regulated price. New traders did not join the market, because the regulated price was based on cheap Russian gas and the gas pipeline interconnection with Poland was under development.
As of 1 May 2023, the natural gas market is fully open: i.e. households must choose their own natural gas trader. The incumbent Latvijas Gāze has no consumers bound to them. The price for natural gas is not regulatedThe Public Utilities Commission continues to set tariffs for transmission, storage and distribution of natural gas. This means that natural gas will be delivered to households at market price, plus an obligation to offer a universal service for six months at a capped market price.
Currently there are only three natural gas traders acting in the retail market for natural gas. The incumbent Latvijas Gāze continues to supply households. The state-owned electricity producer, Latvenergo, has also started selling natural gas under the brand name Elektrum. Finally, Elenger, a subsidiary of the the Estonian gas and electricity trader Eesti gaas, has also entered the market. Eesti gaas has also been pre-approved to buy the Latvian gas distribution system operator Gaso. Eesti gaas has announced that it is purchasing American LNG. Other Baltic energy companies have also announced plans to enter the retail market, notably Virši-A, which sells CNG and invested in the now-abandoned Latvian LNG terminal at Skulte.
These companies must offer a universal service option for household consumers for a fixed price for six months. Until 2024, the price is capped at the stock market TTF price plus 30 euro/MWh and the price for the supply of last resort, now at 0.13 EUR/kWh . After that it will be capped at just the price for the supply of last resort based on the outcomes of a public tender.
Checklist: How to enter the retail market for natural gas in Latvia?
A company from any EU country must:
1. Register in the Natural Gas Traders’ Register. To register requires submitting a Notification on the Registration of the Natural Gas Trader (Annex 5) to the Regulator. This can be done electronically using an e-signature.
2. Sign a transmission system service agreement and balancing agreement with the transmission system operator Conexus Baltic Grid or Elering in the joint Estonia-Latvia area.
3. Sign a distribution system service agreement with the distribution system operator Gaso.