Baltics dodge gas row, but fear Nord Stream revival (News Feature)

By Mike Collier Jan 8, 2009, 9:51 GMT

Riga - While Ukraine and Russia remain at loggerheads over gas supplies and many European states feel the chill as a result, the three Baltic states of Estonia, Latvia and Lithuania have been able to watch from the sidelines in relative comfort despite sub-zero temperatures with their own gas supplies unaffected.

Despite being former Soviet states like Ukraine, the Baltics receive their gas via different routes, enabling them to avoid the disrupted supplies encountered elsewhere.

Vinsents Makaris, a spokesman for Latvian gas utility Latvijas Gaze told Deutsche Presse-Agentur dpa that the Baltics had 'no similarities at all' with the situation in the rest of Europe.

'In Latvia we have a unique situation, because we have storage for all natural gas used from October to April. So, in wintertime we don't have any external gas supplies and all gas comes from storage,' he said.

'In summer, when there is small demand across Europe, we take gas directly from Russia and then gas goes directly from Russia to our customers while we load our storage for wintertime.'

Latvijas Gaze's vast Incukalns storage facility, located half an hour's drive from the capital, Riga, also supplies gas to Lithuania, Estonia and even parts of Russia itself.

Something else helps to ensure Baltic gas supplies - the fact that Russian gas giant Gazprom owns more than a third of all three Baltic gas utilities: Latvijas Gaze in Latvia, Eesti Gaas in Estonia and Lietuvos Dujos in Lithuania.

'It's important that Gazprom is our shareholder,' said Makaris. 'Our daily work and cooperation is at a high level, especially as we play the role of supplying gas to the whole Baltic region.'

Yet the Baltics may yet feel some knock-on effects of the Russia- Ukraine gas dispute. The disruption of gas supplies to western Europe has reminded western European politicians of the attractions of the multi-billion dollar Nord Stream gas pipeline planned to run beneath the Baltic Sea from Russia to Germany.

Estonia and Lithuania are among the controversial project's fiercest critics, fearing that Nord Stream would enable Russia to 'bypass' them and cut off supplies at will for political purposes. Estonia has also raised concerns about Nord Stream's environmental impact.

Estonia has effectively refused permission for Nord Stream to run through its waters after failing to grant permission for geological surveys and Lithuania says only an overland route through its own territory would be acceptable.

Latvia takes a more equivocal approach and there have even been rumours that a Latvian link to Nord Stream could be constructed near the town of Dobele.

Estonian Foreign Minister Urmas Paet reaffirmed his country's concerns over Nord Stream at a meeting of EU foreign ministers in Prague on Wednesday in response to comments from former German chancellor and Nord Stream director Gerhard Schroeder, who claimed the pipeline had received approval from all EU member states and would start pumping in October 2011.

'Schroeder is speaking as a member of the Nord Stream management,' Paet told the Baltic News Service, adding that no final decision could be made until a full assessment of the projects environmental impact had been made.

'The EU also should bear in mind that Russia as a gas supplier is not entirely reliable and look for other alternatives,' Paet said, a sentiment sure to be echoed in freezing rooms across other former Eastern Bloc countries.