Lithuanian Gas: Deal with Gazprom on Gas Price Cut is Reached
Lietuvos Dujos (Lithuanian Gas), Lithuania’s gas distribution and supply company, announced it has finally reached a deal with Russian Gazprom on a “significant” reduction - up to 20 pc - on the natural gas import price.
Although the company’s officials did not elaborate, some of the unofficial sources have hinted the discount might be in the range of 20 pc.
It is said unofficially the proposed price of gas Gazprom would be 370 US dollars per 1 000 cubic meters, 24 percent, or around 118 US dollars lower than the current price at $ 488 dollars (per 1 000 cubic meters.)
Gazprom’s press service could not be reached by Natural Gas Europe for comment on Thursday.
“This agreement has finalized long-running and complex negotiations between Lietuvos Dujos and Gazprom. The representatives of both companies, in active cooperation with the boards of the companies and with due consideration of the interests of the shareholders and customers of Lietuvos Dujos, managed to find mutually beneficial solutions that will allow the reduction of natural gas prices for the customers of Lietuvos Dujos in the nearest future,” Lietuvos Dujos said in an officials statement.
The agreement is expected to lay out the basic principles for gas pricing from late 2015, when the current long-term gas supply contract expires, and thereafter, with the focus being made on the preconditions for the contract’s renewal.
Lithuanian PM Algirdas Butkevicius touted the tentative deal, saying it will allow lowering gas prices for Lithuanian consumers.
“The agreement will create the preconditions for a marked reduction in the price of natural gas for consumers. Under the agreement, the new formula for calculating the price of gas imported by Lietuvos Dujos will be in effect until the expiration of the long-term contract on Dec, 31, 2015,” he said in a press release.
Importantly, he stressed, if the price were cut, Lietuvos Dujos would not pursue the international arbitration over the Gazprom gas price in the Stockholm Court of Arbitrations.
Meanwhile, Lithuanian Energy minister Jaroslav Neverovic announced this week that Qatar Liquefied Gas, the world’s largest LNG supplier, is “a serious candidate” for a mutual contract to supply 0.5 billion cubic meters of natural gas per year to Lithuania for five years.
The deal is said to be in the final stage of talks, which, if successful, would wrap up the minister’s recent visit to Qatar and the ensuing talks with the Qatari LNG officials.
“We intend to have the contract ready, so that we could ensure receiving Qatari gas in January. We’re flexible, and we don’t need to complete talks in a rush,” Neverovic told, adding the offers Lithuania is getting are lower than the current Gazprom gas price.
How much Lithuania will be buying from Gazprom will depend on the price the Russian gas giant will offer.
US and Norwegian companies are also seen as possible LNG suppliers to Lithuania.