Looking back at the first heating season passed after Latvijas gaze’s division, the company’s chairman Aigars Kalvītis mentioned in an interview that the country was close to an energy crisis.
He admits that conclusions about the last heating season are rather harsh.
«Winter was mild. Real cold was only experienced for three weeks. We were rather nervous about gas supply security at one point. Liberalization of the country’s gas market was focused on the mystical assumption that opening the market would somehow help reduce prices, rather than ensuring security of supplies. That was the political focus. We had to sacrifice security of supplies in hopes of providing lower prices to consumers. I will be harsh and say that had air temperature stayed at -20 C for a couple of days in winter, Latvia would have experienced an energy crisis,» said Kalvītis.
This can be explained not with gas volumes, but rather the pressure of Inčukalns’ underground facility.
«There is gas in the storage facility, but would not be able to reach the necessary pressure to satisfy demand observed on the coldest days. The storage facility functions in accordance with balloon principle: the fuller it is the faster air comes out. The same happens with gas. If the storage facility has a shortage, there is not enough pressure,» says Kalvītis.
He also mentioned that there were two days in winter when Latvijas gaze had almost experienced difficulties with satisfying demand.
«We had two days in winter when we almost could not satisfy the market’s demand, because gas was requested for consumption in Latvia, Estonia and Lithuania, as well as Russia, which used Inčukalns to store some of its gas. We were saved because weather got warmer,» said Kalvītis.
He says this signifies a serious problem. Amendments to Cabinet of Ministers requirements were developed after the ‘harsh lesson’ from last year’s winter.
Last year, Latvijas gaze operated with turnover worth EUR 330.956 million and profits of EUR 26.048 million.