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International Internet Magazine. Baltic States news & analytics Monday, 21.01.2019, 22:30

Achema cuts production due to high gas prices

BC, Vilnius, 12.06.2018.Print version
Lithuania's fertilizer producer Achema, part of Achemos Grupe, one of the largest business groups in Lithuania, is cutting production volumes and halting part of its equipment due to high gas prices and low product prices, informs LETA/BNS.

Achema's head Ramunas Miliauskas says the company made the decision on Monday to halt one of its ammonia production facilities.

"We now have a very unfavorable situation, called price scissors, when global fertilizers prices are low but gas prices remain very high. The gas price has risen even further, compared to the cold period. We are, therefore, forced to respond to the plant's difficult situation and take determined action to bring the situation under control," Miliauskas said in a statement.

According to Achema, part of the carbamide production facility and the cogeneration plant do not work, and other productions units are also reducing production volumes.

The LNG terminal fee is raising production costs for Achema, Miliauskas said.

"All European fertilizer producers buy gas for similar prices but Achema has to pay the LNG terminal fee of around 20 million euros a year, even if it does not use the gas. It raises production costs for the plant and undermines its competitive capacity in both local and global market," Miliauskas said.

Energy Minister Zygimantas Vaiciunas said last week the maintenance of the LNG terminal should be around 40 cheaper for Achema, the largest gas consumer, and other gas consumers as of the middle of next year.

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