Energy, Gas, Gas Market , Lithuania

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Lithuanian government joins Achema-EU dispute over aid for Klaipeda LNG terminal

BC, Vilnius, 31.07.2019.Print version
The Lithuanian government has decided to participate in an EU General Court case in which Achema and Achema Gas Trade contest a new scheme for covering the Klaipeda LNG terminal's costs that was put into place in early 2019 after being endorsed by the European Commission.

The Energy Ministry told that the Cabinet decided on Wednesday to join the proceedings as a third party. 


"The interest of Lithuania as a state in this case is to ensure that Achema's request to annul the European Commission's decision is rejected and that it has no negative consequences for ensuring the operation of the LNG terminal, and to protect the interests of all natural gas consumers," the ministry said. 


In their action brought in early April, Achema and Achema Gas Trade are contesting the Commission's decision, adopted last October, to approve a modified state aid scheme for the Klaipeda LNG terminal.  


Both the fertilizer manufacturer and the gas trade company are part of Achema Grupe, one of Lithuania's largest business groups.  


Last October, the Commission, based on EU state aid rules, approved a new scheme for compensation to state-controlled Lietuvos Energijos Tiekimas (Lithuanian Energy Supply, or LET) for ensuring the LNG volume necessary for the LNG terminal to remain operational. 


Under the scheme, the obligation on energy producers to purchase gas from LET, the designated supplier, was discarded. The company continues to be compensated for its costs from the so-called LNG Supplement tariff. 


Gintaras Balciunas, a lawyer and deputy chairman of Achemos Grupe's management board, has told that the new scheme distorts competition in favor of LET, which buys gas under a long-term contract with Norway's Equinor, and against other gas trade companies. 


Moreover, Achema, the country's single largest natural gas consumer, pays the largest part of the LNG Supplement, according to Balciunas.


Following the abolition of the purchase obligation, LET sells gas directly on the market. 


Under the contract with Equinor, LET continues to purchase the mandatory quantity of LNG, four shipments a year, which it then resells on the Lithuanian, regional or international market.

 






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