London, 11 September (Argus) — Lithuania is attempting to use its role in transporting gas to the Russian enclave of Kaliningrad to secure a gas price cut from Russia's Gazprom, amid negotiations over Lithuania's attempts to comply with the EU's third package of energy market reforms.
Gazprom chief executive Alexei Miller and Lithuanian prime minister Algirdas Butkevicius met last week to discuss a possible reduction in the cost of Lithuania's Russian gas imports, alongside the Lithuanian government's plans to buy out Gazprom's stake in newly formed transmission system operator Amber Grid. The country's transmission system was, until August, run by gas distributor Lietuvos Dujos.
But Butkevicius said he was “not optimistic about prices”, and that any new deal on prices would probably be short term. Despite attempts to diversify the country's gas supply, Lithuania will need to maintain a long-term supply agreement with Gazprom beyond 2015, Butkevicius said.
Lithuania imported 3.3bn m³ from Gazprom last year.
But the country is constructing a 1.5bn m³/yr LNG terminal due to start up by the end of 2014, with capacity steadily increasing to 4bn m³/yr by an as yet unspecified date. Lithuania will also award its first shale gas exploration licence on 16 September.
Butkevicius said he had discussed the possibility of cutting transmission fees to ship gas to Kaliningrad in return for lower Russian supply prices.
But he insisted that Lithuania would not drop an arbitration case it brought against Gazprom in October last year in return for cheaper supply.
In those proceedings, Lithuania contended that it was paying well over the odds for Russian gas — and blamed Gazprom, which owns a 37.1pc stake in Lietuvos Dujos, for approving unfavourable terms.
Given recent arbitration awards against Gazprom in cases brought by other companies, Lithuania's government is confident that the arbitration will be decided in its favour. “Gazprom knows that its 100pc dominance of the Lithuanian market will soon be a thing of the past. Therefore, it is in Gazprom's own interest to reach agreement with us and limit the fallout from losing its case at the Stockholm tribunal”, Lithuanian environment minister Valentinas Mazuronis told Argus.
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