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Lithuania to manage without Gazprom's gas auctions

BC, Vilnius, 20.09.2016.Print version
Gazprom, which lost most of the Lithuanian market this year, will not hold a second auction of gas sales to the Baltic states, but Lithuania's energy minister and market players say this will not cause any problems to the country, which will continue buying gas from Norway's Statoil and other suppliers, or from the Russian gas giant under direct contracts, writes LETA/BNS.

Energy Minister Rokas Masiulis says that Gazprom's decision not to hold repeated auctions would not cause trouble for Lithuania, as gas is available on the liquefied natural gas (LNG) market. In his words, nearly all gas suppliers on the global market can bring large amounts of gas by ships.

"In any case, we will go for the best price.  We do not see any problems. All suppliers carry (gas) on the biggest ships, you buy on the market, you see a good price and you have gas delivered to you by a large ship,” Masiulis told.


A representative of Gazprom's subsidiary, Gazprom Export, has confirmed that the concern would not hold another gas auction for the Baltic states this year. Gazprom Export's CEO Yelena Burmistrova said back in May that no auctions had been planned for the rest of 2016.


Lithuanian gas market participants also say that the country will be able to purchase gas both from Russia and from other markets.  


"We have access to the gas market. Another thing is that the fact that there will be no auction does not mean that Gazprom will stop supplying gas to the Baltic countries,"told Dalius Misiunas, CEO of the state energy group Lietuvos Energija.


Misiunas did not rule out the possibility that Gazprom might continue to sell gas under bilateral contracts, but he would not comment on whether Lietuvos Energija was on talks on such a deal.  


Vidmantas Jankauskas, an energy expert, believes that purchasing gas from Gazprom Export via auctions is beneficial to Lithuanian companies.


He thinks that a possible decline in Russia's gas production on one hand and a possible increase in Russian gas consumption in Europe on the other hand could be a reason behind Gazprom's reluctance to hold such auctions.


"I'd speculate that Europe has purchased more (gas) from Russia and perhaps they (Russians) have no need to sell. It is often noted that it is difficult to say by how much production in Russian can be increased and that the conditions there are not very easy," the expert said.


"My guess would be that gas consumption has increased and they are not very much willing to release additional quantities into the market," he said.


In an auction held for the Baltic countries last March, Gazprom sold more than 420 mln cubic meters of gas to six buyers.


Lithuania this year plans to purchase more than a half of its gas needs from Norway's Statoil, at around 1. 35 bln cubic meters, and the remaining amount of about d 0.7 bln cubic meters from Gazprom, Statoil or other suppliers.


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