VZCZCXRO7663
PP RUEHAG RUEHAST RUEHDA RUEHDF RUEHFL RUEHIK RUEHKW RUEHLA RUEHLN
RUEHLZ RUEHPOD RUEHROV RUEHSR RUEHVK RUEHYG
DE RUEHRA #0930 3551101
ZNR UUUUU ZZH
P 211101Z DEC 07
FM AMEMBASSY RIGA
TO RUEHC/SECSTATE WASHDC PRIORITY 4609
INFO RUEHZL/EUROPEAN POLITICAL COLLECTIVE
RUCPDOC/DEPT OF COMMERCE WASHDC
RUEATRS/DEPT OF TREASURY WASHDC

UNCLAS RIGA 000930 
 
SIPDIS 
 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: ENRG EPET ECON PREL RS LG
SUBJECT: Gazprom and Latvijas Gaze agree on new natural gas supply 
contract 
 
¶1. Latvijas Gaze (LG), the central natural gas provider in Latvia, 
announced on December 14 that it had reached agreement on a new 
supply contract with Gazprom for 2008-2010.  In line with Gazprom's 
pricing policy and its efforts to even out gas prices across Europe, 
the new tariff for Latvia will be higher than in previous years. 
The rate will be in part tied to the global price of oil, and LG 
projects an overall increase of up to 50% relative to 2007. 
 
¶2. Andris Piebalgs, the European Commissioner for Energy and a 
native Latvian, in a recent interview with Diena, Latvia's largest 
newspaper, expressed concerns about Latvia's firm opposition to EU 
initiatives on dividing up energy markets and limiting monopolistic 
behavior.  Piebalgs stressed that Latvia should be working on 
decreasing its dependency on a single energy provider, not vice 
versa.  Piebalgs specifically criticized Latvia's resistance to the 
so-called "Gazprom clause" that calls for separation of energy 
production and the ownership of supply infrastructure, such as 
pipelines.  He noted that the clause would help Latvia decrease its 
dependency on its only natural gas supplier - Gazprom, and added 
that not having control over the supply infrastructure will prevent 
Latvia from choosing an alternative natural gas supplier in the 
future. 
 
SELDOWITZ