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Published: 3 january 2013 12:03

Lithuania seeks to fix new price formula for Gazprom’s gas

„RIA Novosti“/„Scanpix“ / „Gazprom“

Lithuania’s government seeks to have a new gas price formula fixed in a supply contract between Russia’s gas giant Gazprom and its partially owned Lithuania’s gas imports and transportation company Lietuvos Dujos (Lithuanian Gas), says Lithuania’s Prime Minister, adding that this was the purpose of the meeting between one of Gazprom’s executives and Lithuania’s Energy Minister, which took place at the end of December.

“I think that this meeting was also necessary so as to prevent the situation in which a certain formula used to calculate the price of gas is approved or applied unilaterally once again. Our goal is to talk and seek, through negotiations, for the price of gas to be lowered for Lithuania,” Algirdas Butkevičius said in an interview with the Žinių Radijas on Thursday, commenting on the meeting between Alexander Medvedev, CEO of Gazprom Export, and Jaroslav Neverovič in Vilnius.

On 20 December, Medvedev attended a meeting of Lietuvos Dujos’ board, which, according to Butkevičius, was to approve a new contract on the supply of gas to Lithuania since the previous contract expired on 31 December.

The existing long-term gas supply contract between Gazprom and Lietuvos Dujos will remain in effect until the beginning of 2015. At the end of each year, the parties sign an addendum to the contract, which establishes specific gas purchase volumes and prices for the next one-year period.

Jolita Butkienė, spokeswoman of Lietuvos Dujos, told BNS that the company’s management shared the government’s view that the price of gas for Lithuania could decrease by around one-fifth.

“The management of Lietuvos Dujos would share the government’s view that the price could decrease by around one-fifth if talks with Gazprom were to take place. It would be realistic and justified,” Butkienė told BNS.

Butkevičius earlier mentioned that Lithuania wanted the price of gas to be lowered by around one-fifth and said that the government would seek to convince Gazprom. The government plans to establish a task group for talks with Gazprom. Moreover, an intergovernmental meeting with Russia’s officials should be held in January.

“They wanted to meet with me but the issues of discussion have not been included in the agenda hence it was only the meeting with the Energy Minister since the board also includes a representative of the Energy Ministry,” Butkevičius said on Thursday.

Prime Minister earlier said that the authorities would talk in diplomatic language with Gazprom instead of fighting.

It is said that the gas price formula for Lithuania has been revised five times since 2005 and was eventually tied to soaring oil product prices in the world's markets. The previous government wanted the gas price to be linked to biofuel prices.

The average price of gas supplied to Lithuania made up 504 US dollars (LTL 1,311, EUR 380) per 1,000 cubic meters last November.

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