In 9 months of 2010 Joint Stock Company „Latvijas Gāze” (hereinafter - LG) sold
to consumers 1 200 million m3 of natural gas, which is by 26 % or 244 million
m3 more than it had been budgeted and by 23 % more than in the respective
period of 2009.

The increase of natural gas consumption among both industrial and residential
customers during the 9 months of 2010 stems from the protractedly low air
temperature in the 1st quarter of 2010 and competitive natural gas sale price
because clients received natural gas from Inčukalns Underground Gas Storage
Facility (hereinafter - Inčukalns UGS) which was bought in autumn 2009 for
considerably lower price than fuel oil price in the market because of the
rising oil product quotations in the stock exchange. In the beginning of 2009
there was opposite trend - heat supply companies began to use fuel oil and
other alternative fuel because of the high natural gas prices.

The injection season at the Incukalns Underground Gas Storage Facility
(hereinafter - Incukalns UGS) was completed on October 18, 2010, ensuring
availability of 2 billion cubic metres of natural gas for the heating season.

In 9 months of 2010, consumers were sold natural gas and provided services for
LVL 230 million, which is by 3 % less than in the respective period of 2009,
still by 29% more than planned in the budget of 2010. The fall of income
towards the respective period of 2009 stems from the industrial users and
residential customers being applied the discriminative natural gas sale end
tariffs in the 1st quarter of 2010. These tariffs corresponded to the natural
gas sale price, which was by 83 % lower than in Q1 of 2009. The income,
compared to 2009, decreased both from industrial and household customers. The
income from transmission and storage, for its part, increased, as other
countries used the services of the Inčukalns UGS more intensively due to the
cold weather, as well as there were higher tariffs of natural gas storage in
the 1st quarter of 2010.

LG completed 9 months of 2010 with a profit of LVL 9.2 million, which is by 59
% higher than in the respective period of 2009 when the profit amounted to LVL
5.8 million. The profit has risen due to the increase of natural gas sales.

Within the framework of the capital investment programme, LVL 15 million of
investment funds were taken up over 9 months of 2010. The funds were mostly
spent on the construction of new gas pipelines and the renovation of existing
ones, reconstruction of wells, modernization of technological equipment, as
well the reconstruction of engineering buildings and constructions.

Vinsents Makaris
Phone + (371) 67 369 144
E-mail: [email protected]

2010_9_months.pdf