Lithuanian Gas submits unbundling action plan to price watchdog

Shareholders of Lietuvos Dujos, and later the company’s board, on Monday approved a plan on the unbundling of the company’s operations under which gas transmission operations will be spun off into a new company by 31 July 2013, and the distribution operations will be taken over by a newly established subsidiary by Oct. 31, 2014.

Russia’s gas giant Gazprom, a shareholder of Lietuvos Dujos (Lithuanian Gas), stated at the shareholders‘ meeting that it had been forced to approve the reorganization of the Lithuanian gas imports and transportation company due to pressure exerted by Lithuania’s public authorities.

Unofficial sources told BNS that Alexander Medvedev, CEO of Gazprom Export, held talks with the Energy Ministry on Monday with the aim to postpone the unbundling beyond the end of October 2014. Lithuania turned that possibility down and later Gazprom made a statement about pressure exerted by Lithuania’s authorities.

With Lietuvos Dujos reorganized by October 2014, natural gas transmission pipelines and other infrastructure necessary for transmission operations will be spun off into a new company. Lietuvos Dujos will continue to operate as a gas supplier, while its distribution operations and distribution pipelines will be taken over by a newly established subsidiary.

Unofficial sources say that in the future, the state is likely to take back control of the gas transmission grid, possibly jointly with a new investor. Energy Minister Arvydas Sekmokas has said repeatedly that the natural gas transmission pipelines should be owned by the state.

Lietuvos Dujos, the supplier, and its newly-established distribution subsidiary are likely to be owned by Gazprom jointly with E. ON.

Some analysts believe that Lithuania’s natural gas transmission pipelines might be worth up to 1 billion litas (EUR 289.85 mln) depending on the valuation method.

The government has set an end-2014 deadline for the unbundling of Lietuvos Dujos' transmission, distribution and supply assets in line with the EU's third energy package.

Gazprom owns 37.06 percent of shares in Lietuvos Dujos, E.ON Ruhrgas International holds 38.9 percent, and the Energy Ministry holds 17.7 percent.