“We are surprised. Such measures do not help maintain the dialogue, which was started at the meeting held on February 27,” Kęstutis Jauniškis, an aide to energy minister Arvydas Sekmokas, told BNS.
On Wednesday The government approved a draft decision under which the term for the submission of the final schedule for Lietuvos Dujos’ ownership unbundling was extended by two months, to 31 May. Sources told BNS that the extension of the term was agreed at the meeting of the representatives of Lithuania’s government, the European Commission and Gazprom in Vilnius on Monday.
Meanwhile, Gazprom stated on Thursday that it had filed a suit with UNCITRAL arbitration in order to protect its investments in the light of natural gas sector’s reorganization implemented by Lithuania’s government.
A Gazprom’s representative announced it at Thursday’s meeting of Lietuvos Dujos (Lithuanian Gas) board, devoted to discussing the splitting of Lithuania’s gas imports and transportation company, Gazprom said in a press release.
“Gazprom regrets that the agreements reached during a working meeting with the representatives of the Lithuanian government and the European Commission on February 27 were not fulfilled,” the Russian concern said.
Lithuania ’s Prime Minister Andrius Kubilius, Energy Minister Arvydas Sekmokas, Gazprom Export CEO Alexander Medvedev and Philip Lowe, director general for energy at the European Commission, discussed the reform planned in Lithuania at Monday’s meeting in Vilnius.
The agreements reached during the meeting have not been unveiled. The prime minister’s press service on Monday issued a statement saying that “the discussions went on constructively so as to solve all outstanding issues” and the participants of the meeting agreed to hold another meeting by the end of March.
Kubilius told the media that the participants of the meeting had agreed that the reorganization of Lithuania’s gas sector should be implemented by the end of 2014 and discussions with Gazprom were benevolent enough.
In line with the existing Law on Natural Gas, Lietuvos Dujos, which is controlled by Germany’s E.ON Ruhrgas and Russia’s Gazprom, shall submit a plan on the unbundling of gas transmission system to the National Control Commission for Prices and Energy by 31 March. Under this plan, gas transmission business will have to be handed over to a new owner in several years’ time.
The implementation of the European Union’s (EU) third energy package, under which Lithuania intends to unbundle Lietuvos Dujos’ transmission, distribution and supply activities, shall be completed by the end of 2014.
On 14 June 2011, Gazprom filed its first complaint with the Stockholm Arbitration Institute, asking it to prohibit Lithuanian courts from hearing a case over Energy Ministry-initiated investigation into operations of Lietuvos Dujos, but a special arbitrator rejected the complaint on 24 June. In late August, the company went to the institute again, asking it to launch arbitration proceedings.
The Russian gas monopolist wants the Energy Ministry's court action against Lietuvos Dujos and its management be qualified as violating the Lithuanian company's shareholder agreement and seeks compensation for losses incurred as a result.
Stockholm arbitration court should hear the dispute between Lithuania‘s government and Gazprom on 29-30 May.
Meanwhile, the Vilnius Regional Court, which is hearing a claim lodged by the Energy Ministry against Lietuvos Dujos, should start examining the case on 13 March.
The Lithuanian government owns 17.70 percent of Lietuvos Dujos, which is listed on the blue-chip Main List of the NASDAQ OMX Vilnius stock exchange. Gazprom holds a 37.06 percent stake and E.ON Ruhrgas International owns 38.9 percent of shares in the Lithuanian gas imports and transportation company.
Misunderstanding within Gazprom
Lithuania will wait for specific official information about the latest decisions taken by Russia’s gas giant Gazprom and their reasons before taking any measures, Energy Minister Arvydas Sekmokas has said.
He admitted being surprised at reproaches that Lithuania had not fulfilled the agreements reached at the government’s meeting with the CEO of Gazprom Export and a representative of the European Commission on 27 February.
“We are surprised at such a statement. In fact, the meeting with Alexander Medvedev was constructive and such actions by Gazprom would actually not contribute to the positive dialogue that was started then. In fact, it [Gazprom’s statements about Lithuania’s failure to fulfill the agreements] sounds very strange to me since we actually did all the things that were agreed during the meeting... We considered those requests, which Gazprom submits to us, at the government’s meeting and agreed unofficially that we would satisfy them,” Sekmokas told BNS on Thursday.
In the minister’s opinion, statements by Gazprom’s representatives about filing a suit with arbitration might have resulted on the lack of agreement within the Russian gas concern.
“Now we have statements and I think that we should not rely on statements, which may be interpreted and understood in one or another way. We have to be calm and wait until we know what actual actions Gazprom has taken, whether it has addressed the arbitration, whether that claim is justified, what they accuse us of, what actions, in their opinion, we have not taken, and then we will be able to make specific conclusions. I think it is actually lack of agreement and misunderstanding within Gazprom,” Sekmokas said.
Lithuania ’s representatives first heard about Gazprom’s suit with arbitration at Thursday’s meeting of Lietuvos Dujos’ board, he added.
Possible to avoid arbitration
Russia’s gas giant Gazprom does not rule out the possibility to avoid new arbitration with Lithuania over the protection of the concern’s investments in the country.
“We hope that the agreements reached on 27 February will be implemented before the meeting of Lietuvos Dujos’ shareholders and it will allow to avoid arbitration,” a press release from Gazprom quoted vice-president Alexander Medvedev as saying.
This release was issued a couple of hours after Gazprom’s statement about filing a suit with international arbitration.
Sources told BNS that Gazprom had recently sent a letter to the European Commission, in which it had welcomed the results of the 27 February meeting. “The letter is positive, thanking for the meeting,” an official familiar with the letter said.
PM downplays Gazprom's step
Lithuania's Prime Minister Andrius Kubilius, currently on a visit in Brussels, downplays Gazprom's appeal to international arbitration, expressing hope that the constructive talks underway with the Russian gas company would produce good results.
"We should not jump to dramatizing the statements about the international arbitration, this may be aspects of negotiations. But I would like to emphasize that we're optimistic about the talks held with Gazprom representatives over past weeks. We are determined to have a productive and constructive dialogue, and we'll agree on implementation of the European Union's (EU) Third Package by 2014. The last talks were indeed constructive and we expect good results," Kubilius said in a telephone interview to BNS on Thursday.
