* Price discount to last until late 2015
* Oil link to remain in place
* Lithuania seeks first LNG imports in 2015
(Adds LNG deal, links)
By Nerijus Adomaitis and Andrius Sytas
LONDON/VILNIUS, May 8 Lithuanian utility
Lietuvos Dujos said on Thursday it has won cheaper
gas from Gazprom until the end of 2015, as the
pressure of competing liquefied natural gas (LNG) and a European
pricing probe put pressure on the Russian giant.
The deal was announced a day after Energy Minister Jaroslav
Neverovic said Lithuania was in talks with leading global
suppliers of LNG, including Norway and Qatar, and wanted to sign
the deal as soon as possible.
Lithuania has accused Moscow of manipulating gas prices for
political gains and the European Commission has been
investigating Gazprom's pricing policies in eastern Europe based
on complaints from a number of countries in the region.
"Lietuvos Dujos has entered into an agreement with Gazprom
that involves a significant reduction in the price of natural
gas," the company said in a statement to the stock exchange in
It did not disclose the price but company officials said
that Gazprom, which owns 37.1 percent of Lietuvos Dujos, had
kept a link to oil prices in place.
"The agreed price level provides a good basis to negotiate
gas supplies after 2015, and the price formula could look
different then," Joachim Hockertz, deputy general director at
Lietuvos Dujos, told Reuters.
Lithuanian prime minister Algirdas Butkevicius has said he
expected Gazprom to lower the price by around 20 percent, as
high gas prices had hurt producers and households.
Lithuania had paid $465 per 1,000 cubic metres of gas at
end-2013, data from the energy market regulator showed.
Russia raised the gas price for Ukraine last month, almost
doubling it in three days to $485 per 1,000 cubic metres, much
more than the average price paid by consumers in the European
"I think that it's quite a significant breakthrough if we
are talking about price discounting by 20 percent or more, but I
don't think that it could stop the European Commission's
investigation," former energy minister Arvydas Sekmokas told
Germany's E.ON has 38.9 percent of Lietuvos Dujos,
and state-owned energy group Lietuvos Energija 17.7 percent. The
latter is seeking to buy E.ON's stake.
Lietuvos Dujos has 40 percent of the domestic market.
Lithuania's floating LNG import terminal, named
"Independence", is to start operating at the end of the year. It
will allow imports of gas on tankers of up to 2 billion cubic
metres (bcm) annually, enough to meet two-thirds of domestic
Lithuania's biggest gas consumer, fertilizer producer
Achema, told Reuters it was considering buying up to 200 million
cubic metres of gas via the LNG import terminal as it was
struggling to agree price discounts with Gazprom.
It said it was being forced to half its production from
mid-May to limit losses as fertilizer prices dropped while gas
prices, the bulk of production costs, remained high.
"By offering cheaper gas Gazprom is making the LNG terminal
less attractive to potential customers," said Tadas Povilauskas,
an analyst at Vilnius-based Finasta bank.
Lithuanian President Dalia Grybauskaite has said the ability
to import LNG would put an end to the "existential threat" of a
dependence on Russian energy supplies.
Lithuania's efforts echo moves by others in the region -
including Poland, Estonia and Finland - to improve gas
infrastructure and diversify sources.
(Editing by Henning Gloystein and William Hardy)