Baltic States – CIS, Energy, Gas, Legislation, Lithuania

Lithuania could purchase up to 500 million cubic meters (cbm) of gas from Russia next year, Haroldas Nauseda, director of Commerce Department at LDT, said.

Asked on Wednesday by members of the parliamentary Committee on Economics whether the company had already opened talks with Gazprom, he said “yes”.

The specific volume of gas was not yet being discussed, Nauseda said, adding that estimated demand for the Russian gas might reach 500 million cbm in 2016.

Specific volumes depended on the operations of industrial companies as well as on the use of biofuel, he explained.

Next year, Lithuania should consume approximately 2 billion cbm of gas, including around 1.2 billion cbm, which would be used by Achema, a fertilizer producer that purchases gas directly from Gazprom, and at least 300 million cbm of LNG supplied by Statoil. Hence the share of LDT might reach up to 500 million cbm. Moreover, Lithuania will not purchase approximately 300 million cbm of Gazprom’s gas by the end of this year and will be able to purchase this quantity next year.

Social Democratic MP Arturas Skardzius told BNS that it would be very difficult to reach an agreement with Gazprom on such a small quantity as 500 million cbm.

LDT was aware of Gazprom’s intentions to organize the first gas auction for the Baltic countries in December, which would send a certain signal to the market, Nauseda said, adding that if the price offered by the Russian gas concern for Lithuania was too high, the country could purchase gas from Latvia.

“It’s interesting what will be the price and what will be the terms. It would be something similar to what was in Germany a month or so ago. Also, it will be a certain signal. Of course, the situation in our region varies – the contract signed by the Estonian gas company will also expire this year whereas Latvia’s contract will remain in effect until 2030. It… opens up possibilities to purchase gas from Latvia if Gazprom decides to lift the price for our country or apply certain unsuitable prices,” Nauseda said.

The long-term supply contract between LDT and Gazprom expires at the end of this year. Last year, the Russian gas concern applied a 21-percent discount for gas purchased between 2013 and 2015 hence the price that might be applied next year is still unknown.