Sekmokas said that Lithuania decided to initiate an arbitration procedure against Gazprom at the Stockholm arbitration tribunal after failed efforts to reach an agreement through negotiations.
"There were several very important factors. One of them is those arbitration suits brought against Lithuania by Gazprom. We saw certain steps from Gazprom (showing) that it was not taking the path of negotiations. What we have always sought is to come to an agreement. The second important factor is the Stockholm arbitration tribunal, which has acknowledged Lithuania's right to refer the gas price (issue) to the Stockholm arbitration tribunal; and, third, there is the European Commission probe. These were the factors that influenced our decision," he told reporters when asked why Lithuania decided to take the legal move several weeks before the general election.
The minister said that Lithuania contacted Gazprom several times recently, but did receive any answer so far. He added that the dispute with Gazprom at the Stockholm arbitration tribunal may last up to two years.
On Wednesday, Lithuania decided to initiate a suit against Gazprom at the Stockholm arbitration tribunal demanding up to 5 billion litas in overpayments for gas that the Russian company has supplied to the country at allegedly unfair prices since 2005, when a gas price formula that had been agreed with Gazprom in 2002 was changed.
According to sources at the government, the suit is to be filed later on Wednesday.
Sekmokas said that Gazprom's gas price to Lithuania increased six-fold, to 497 US dollars per 1,000 cubic meters in 2012, from 84 dollars in 2004.
He said that compensation of losses would be a subject of negotiations with Gazprom.
The then government of Social Democratic Prime Minister Algirdas Brazauskas, who died in 2010, said during the privatization of Lietuvos Dujos (Lithuanian Gas) in 2004 that a long-term gas supply contact, signed at that time, provided that the price of gas supplied by Gazprom would remain stable and predictable until 2015. However, Gazprom then said that the price formula, which was linked to fuel oil prices, might change in the future.
It is said that the gas price formula has been revised five times since 2005, eventually tying it to soaring oil product prices in the world's markets.
Lithuania now wants the gas price to be linked to biofuel prices.
Gazprom and the Lithuanian government signed an agreement on the acquisition and sale of a 34-percent stake in Lietuvos Dujos in January 2004. The 100-million-litas deal was finalized in March of that year.
The European Commission is carrying out an investigation into Gazprom's operations in Central and Eastern Europe. Among other things, it suspects that the supplier could have imposed unfair prices on its customers by linking the cost of gas to oil prices. The Lithuanian government has filed a complaint to the EU's executive body over possible unfair pricing and abuse of market dominance by Gazprom.
Lithuania, which currently pays the highest price for Gazprom's natural gas in the EU, thinks that the Russian supplier applies discriminatory prices to the country, which is the first Baltic state that is implementing the EU's third energy package and aims to unbundle the assets of Lietuvos Dujos.
