Latvia Plans to Boost Gas Storage Capacity

Latvia plans to increase capacity at the Incukalns underground gas storage site, the only gas storage in the Baltic states, to 2.8 billion cubic metres (bcm) by 2025, gas utility Latvijas Gaze said on Friday.

The Incukalns site currently holds up to 2.3 bcm of gas, enough to meet two year's of Latvia's consumption.

But the gas from Incukalns is also used by neighbouring Estonia, Russia and Lithuania. Poland may also tap the storage facility in the future if it builds a gas link to Lithuania.

Lithuania plans to start importing liquefied natural gas (LNG) in 2015 and will also use the storage to help smooth out periods between LNG deliveries.

Latvijas Gaze said initially it planned to increase the capacity for extracting gas from the site to 35 million cubic metres per day by 2020 from 30 mcm/day by 2020 and then later to boost storage capacity at a total estimated cost of 377 million euros.

Latvia expects to store 1.05 bcm of gas for itself, 450 mcm for Estonia and 100 mcm for Lithuania in 2015, Latvijas Gaze estimates showed.

That would indicate that 800 mcm of gas would be reserved for gas supplier Russia, which uses it for is town northwestern region.

Latvijas Gaze could not immediately be reached for additional comment.

The gas utility, which operates Incukalns and sells gas imported from Russia, is 34 percent owned by Gazprom and 16 percent by gas trader Itera Latvia. Germany's biggest utility E.ON has a 47.2 percent stake but it wants to sell the shares.

Latvia's government and two Lithuanian energy firms submitted non-binding proposals.

(Reporting by Aija Braslina; writing by Nerijus Adomaitis; editing by Jane Baird)