* New company to operate the region's only gas storage
* Gazprom, Uniper expected to sell stakes in new operator
* Latvia government to decide in Jan whether to buy stakes
(Adds officials, detail, background)
By Gederts Gelzis
RIGA, Dec 22 Shareholders in Latvian gas utility
Latvijas Gaze voted on Thursday to set up a new
company, Conexus Baltic Grid, to operate the Baltic state's main
gas pipelines and the region's only underground gas storage.
The move is aimed at meeting European Union rules on
separating gas sales from gas supplies and comes ahead of a
market liberalisation in April that will end the monopoly on
supply in Latvia held by Russia's Gazprom for decades.
Gazprom, which is the biggest shareholder of Latvijas Gaze
with 34 percent, will have a stake of the same size in Conexus
but is expected to sell this by the end of 2017, Latvian
The Russian firm has already exited gas utilities in the
other two Baltic states, Lithuania and Estonia, following a
liberalisation of gas markets there.
The EU is striving to reduce the reliance on Russian gas
across its 28-member states to improve security of supply.
Germany's Uniper and Latvia's gas trader Itera
Latvija are also expected to sell their 18.26 percent and 16
percent stakes in Conexus, respectively.
Latvia's Economy Minister Arvils Aseradens said on Dec. 8 a
number of European gas grid operators and infrastructure
investors had shown an interest in buying into Conexus.
He previously named Germany's Open Grid Europe (OGE),
formerly the gas transportation arm of Germany's E.ON, as one
The Latvian government will decide in January whether it
should use its right of first refusal to acquire shares itself,
European infrastructure fund Marguerite is expected to keep
its 28.97 percent stake in Conexus.
The three Baltic states aim to create a joint gas market by
around 2020, with new gas links to Finland and Poland.
Latvia's 2.3 billion cubic metres underground gas storage,
Incukalns, is seen as key for such a market to emerge as it can
help balance cross-border flows.
(Writing by Nerijus Adomaitis; Editing by David Clarke and Mark