Bloomberg/Warsaw


Lithuania, one of four European Union nations fully dependent on Russia for their natural gas, would pay less for shipments from countries including Qatar than for pipeline supplies from its eastern neighbour. The Baltic state will be able to start importing fuel via a new floating regasification terminal in January and partly replace deliveries from Russia, for which it now pays the highest price in the EU, Lithuania’s Energy Minister Jaroslav Neverovic said on Wednesday in an interview in Katowice, Poland.
Lithuania relies on Gazprom for all of its natural gas and is battling the Russian pipeline gas export monopoly to cut prices it says are at least a quarter more than other European buyers pay. A final agreement on lower prices and other supply terms seems likely this month, Prime Minister Algirdas Butkevicius said last week.
“The terminal will allow us to diversify supplies and act as a virtual pipeline that will provide a price benchmark, which our monopoly supplier will not be able to exceed,” Neverovic said. “The offers we’re getting from suppliers are lower than the price we pay Gazprom.”
Lithuania is in the final stage of negotiations with short-listed LNG suppliers, including Qatar, the world’s biggest producer and exporter of the fuel. Qatargas is a “serious candidate” for the contract for 0.5bn cu m of gas per year for five years, Neverovic said. Gazprom sold Lithuania 2.7bn cu m of gas in 2013, according to the company’s financial report.
“We plan to have the contract in place in time to start receiving gas in January, so we’re flexible, and we don’t need to complete talks by the end of June,” Neverovic said. The main supply agreement would probably be accompanied by a number of smaller spot contracts, he said.
Lithuania pays about 1,200 litai ($484) per 1,000 cu m of Russian gas, the Verslo Zinios newspaper reported last month. That is at least a quarter more than other European buyers, according to President Dalia Grybauskaite.
The German gas price with a reduced fee for transport given Lithuania’s proximity to the source of supply should become a reference point for the cost of Russian deliveries, Neverovic said.
“How much we’ll be buying from Gazprom will depend on the price for Russian gas,” he said. “In the short term, the German price can be a benchmark, while in the long run the market will become more liquid with supplies from the US and Australia and other countries, and will become more of a buyer’s market.”