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Gazprom, Lithuania Strike Deal on 20% Gas Price Cut

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Russian energy giant Gazprom has reached an agreement to reduce natural gas prices for Lithuania by 20 percent, the deputy head of Gazprom's external economic activity legal support department said.

BRUSSELS, May 15 (RIA Novosti) – Russian energy giant Gazprom has reached an agreement to reduce natural gas prices for Lithuania by 20 percent, the deputy head of Gazprom's external economic activity legal support department said.

“Around 20 percent,” Dmitry Khandoga told RIA Novosti answering a question on the possible amount of the discount.

Lithuanian media reports said earlier citing unofficial sources that Vilnius could get a 20 percent discount that will put the natural gas price to $370 per 1,000 cubic meters.

Lithuanian Prime Minister Algirdas Butkevicius said in early May the sides had agreed on such a deal, without giving further details. The new price will be applied from July 1, 2014 through December 31, 2015, when the contract expires.

Vilnius has been at odds with Gazprom over contract prices and the EU Third Energy Package, which will have the Russian company leave the management of Lithuania’s gas transmission operator, Amber Grid, by November.

Besides Lithuania, other gas importing countries, including Turkey, have been pushing to revise the gas price contract with Gazprom.

“We have a permanent dialogue between the consumer and seller Gazprom is not pegging the price, it is a derivate, which means we do not have a fixed price in dollars or euros in the contract…,” Khandoga said, adding that the Russian company has repeatedly asked the European Commission not to intervene in dialogue.

In this respect, Khandoga could not say whether Turkey should be counting on a discount deal recently requested by Ankara similar to the 20 percent price reduction that Lithuania has received from Gazprom.

On May 2, following a meeting with Polish Prime minister Donald Tusk, EU Energy Commissioner Guenther Oettinger announced that EU wants to establish a uniform price for Russian gas in the European common market. He labeled Russian gas pricing mechanism Moscow’s “game of 'divide et impera'.”

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gas prices, Gazprom, Lithuania
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