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

In its quarterly financial report, Gazprom said that its subsidiary Kaunas CHPP bought the Kaunas CHPP property complex from Kauno Energija in 2003. The agreement signed after the tender set forth the condition that market-based pricing would apply to heat supplied by the station to consumers in Kaunas starting in 2009, writes LETA/ELTA.

Gazprom said "However, in 2008, the Lithuanian National Control Commission for Prices and Energy introduced tariff regulation in relation to Kaunas CHPP, rendering it impossible to adopt market prices for thermal energy. In connection with Lithuanian government bodies' failure to comply with the obligations envisaged in the intergovernmental agreement on promoting and mutually protecting capital investments, under which capex protection is guaranteed, Gazprom sent the Lithuanian government notification on the initiation of an investment dispute. A positive reaction was not forthcoming from the government, in connection with which the company appealed to the court of arbitration", steelguru.com said.