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

"I have been informed that AB Lietuvos Dujos has signed a corresponding agreement enabling preconditions to significantly reduce natural gas price for AB Lietuvos Dujos customers," the prime minister's statement read.

According to the head of the Government the agreement establishes a new price formula which will enable to set competitive gas prices for customers of Lietuvos Dujos compared with other companies in the region.

"In accordance to the agreement, the new formula, based on which prices of gas imported by Lietuvos Dujos are calculated, will be valid for the entire long-term contract period until 31 December 2015," Butkevicius said.

Lietuvos Dujos has also informed that calculations have to be carried out under the established procedures which after the approval by the company's managing bodies will be submitted for coordination with the National Commission for Energy Control and Prices.

In accordance with the decision of the General Meeting of Shareholders and upon receiving the authorisation of the Board of Directors, AB Lietuvos Dujos entered into an agreement with the supplier of natural gas OAO Gazprom regarding a significant reduction in the price of natural gas imported by AB Lietuvos Dujos, the company announced.

The share of natural gas imported by AB Lietuvos Dujos is approximately 40% of the total amount of gas in the Lithuanian market. This agreement finalised long-running and complex negotiations between AB Lietuvos Dujos and OAO Gazprom.

The representatives of both companies, in active cooperation with the boards of the companies and with due consideration of the interests of the shareholders and customers of AB Lietuvos Dujos, managed to find mutually beneficial solutions that will allow the reduction of natural gas prices for the customers of AB Lietuvos Dujos in the nearest future.

The agreement signed is aimed at the consolidation of a long-term and sustainable relationship with the clients of the company – natural gas customers, the development of the company's business, and ensuring a transparent and competitive market. The agreement sets forth the basic pricing principles for the period until the expiration of the long-term contract on natural gas supply, and forms preconditions for the renewal of this contract, as well as for further successful and mutually beneficial cooperation between the companies in the future development of the natural gas market in Lithuania.