Latvia’s Virši to buy Skulte LNG Terminal stake

Latvian energy company Virši has signed an agreement with Skulte LNG Terminal to buy 20 per cent of its shares and announced plans to jointly develop an LNG terminal at the port of Skulte.

Since 2016, Skulte LNG Terminal is developing an LNG import terminal project in the Skulte Port area with a direct pipeline connection to an underground gas storage facility. The company’s shareholders are the National Gas Terminal Society and Peter A. Ragauss.

The project has unique geographical, economic, and technological advantages. It requires only 34 kilometres of direct pipeline connection to the Inčukalns underground gas storage facility and does not require investment in LNG storage infrastructure. This typically accounts for 70 to 80 per cent of a terminal’s investment.

The development of this project is to increase the energy independence of Latvia and the Baltic region and contribute significantly to the diversification of natural gas supplies and the further development of the natural gas market.

“The LNG terminal is a matter of Latvia’s energy independence, and Virši, as a locally owned energy company, wants to contribute to the diversification of the country’s energy supply routes. Participation of Virši in the development of the Skulte project is a well-considered step towards achieving the strategic goal of also becoming an energy company. We have studied in depth the location and financial model of the LNG terminal and concluded that it is the most cost-effective and functional natural gas import route in the Baltics, which is why we have decided to support the development of this infrastructure facility by participating in the project as a shareholder,” said Jānis Vība, CEO of Virši.

“It is a strong confirmation of the Skulte terminal’s position on the region’s energy map, allowing us to offer natural gas at attractive prices to consumers and businesses. The experience, capacity and capability of Virši as a local partner will contribute to a faster implementation of the terminal project. AS Skulte LNG Terminal is also continuing negotiations with a pre-selected group of foreign industrial investors on the implementation of the project on the most favorable terms for the Latvian and regional market,” says Renārs Miķelsons, general manager of Skulte LNG Terminal.

“Virši have researched and developed various energy solutions and have concluded that the consumption of methane in the region, including in the form of biomethane and natural gas as a transitional energy carrier, has a good outlook in the next ten years…The LNG terminal in Skulte as an infrastructure facility in combination with the Inčukalns underground natural gas storage facility is an excellent tandem not only for supplying Latvian consumption, but also for creating competitive natural gas supplies for the wider region, which includes the Baltic States as well as Finland and Poland,” explained Vība.