Lithuania To Reduce Dependence On Russian Gas

Lithuania signed a liquefied natural gas (LNG) deal Thursday with Norway valued at $1 billion, which gives Lithuania an alternative gas supply source besides Russia, general manager of Lithuanian natural gas supplier, UAB Litgas, told the Anadolu Agency. 



UAB Litgas and Norwegian Oil Company, Statoil, signed the deal -- the first LNG deal with Statoil in Lithuania's history -- on Thursday.



Lithuania will import 0.54 billion cubic-meters (bcm) of natural gas per year which will cover around 18 percent of Lithuania's total consumption -- it consumed almost 3 bcm of natural gas last year.



"Lithuania has only one import source by gas pipeline from Russia's Gazprom. The new deal with Norway allows Lithuania to diversify the supply of natural gas," says Dominykas Tuckus, general manager of UAB Litgas.



"The pricing of LNG supplied by Statoil is linked to National Balancing Point, Britain's natural gas exchange index. This type of pricing is new to Lithuania and the price of natural has supplied by Litgas will depend on changes in the supply and demand for natural gas, including LNG on the international markets."



Using the UK gas pricing system will not mean that Lithuania is independent of Russian energy dominance, but now has to look to the U.K. who will dictate gas costs.



He said that there would be new possibilities to cooperate in LNG with other European suppliers, adding that if the LNG project proved successful opportunities for new projects would increase and that new gas supply contracts could be signed, and Lithuanian's main LNG terminal near capital Vilnius could be expanded as well as costs could be lowered. 



According to today's prices Lithuanian will pay Statoil 13 dollars less per thousand cubic meters of gas than it was paying to Russia's Gazprom.



Lithuania paid $359 per 1,000 cubic meters of gas to Russia's Gazprom, which was $465 until May 2014. The Baltic country is going to pay 900 to 1,000 Litas ($346 - $384) to Statoil per 1,000 cubic meters, according to figures from Lithuanian Energy Market Regulator.



www.aa.com.tr/en - Ankara