Lithuania’s largest gas consumer reportedly in talks over LNG supply contract

By bne IntelliNews January 18, 2016

Lithuanian fertiliser manufacturer Achema, the largest gas consumer in the Baltic state, is reportedly planning to buy gas directly from Norwegian oil and gas company Statoil in a bid to diversify supply sources, local media reported on January 18.

If the deal comes through, 500,000 cubic meters of LNG would arrive for Achema via the Lithuanian LNG terminal in Klaipeda, which could improve the facility’s difficult business position to an extent. 

Currently, about 540,000 tonnes of LNG is contracted to go through the facility under a five-year contract the state gas trader Litgas has with Statoil. The facility is struggling commercially however, due to falling demand in Lithuania caused by mild winters and competing sources of energy, as well as a lack of enthusiasm amongst major consumers. Achema has led complaints over the maintainance charges large gas users are required to pay, whether or not they buy gas from the terminal.

The LNG under the Statoil contract reportedly costs more than the Russian pipeline gas with which it is designed to compete. Litgas and Statoil are reportedly to sign a new version of the contract in January, extending its duration to ten years, but keeping the volume the same. 

However, Achema has recently been talking with the terminal’s operator Klaipedos Nafta about LNG delivery, according to unconfirmed reports. “Klaipedos Nafta is open to proposals from third parties and is continuously involved in discussions with all parties that express such a wish and want to use access to the LNG terminal,” said Klaipedos Nafta spokeswoman, Indre Miliniene, according to BNS.

The Lithuanian government has also claimed it does not know about Achema looking to diversify gas supplies. The company expected to use around 1.2mn cubic meters of gas in 2016, sourced from Gazprom.

 

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