Gazprom Takes Lithuania to Arbitration Over Gas Unbundling

OAO Gazprom, Russia’s natural-gas export monopoly, is taking Lithuania to international arbitration over its plan to break up the Baltic nation’s sole gas utility.

Gazprom informed the board of Lietuvos Dujos (LDJ1L) AB that it would defend its interests at a meeting held earlier this week, the Moscow-based company said today in a statement. Gazprom holds a 37 percent stake in Lietuvos.

Lithuania is splitting the gas sales and transmission ownership of Lietuvos Dujos as part of the European Union’s drive to force dominant energy companies to improve access for competitors.

“We’re puzzled,” Kestutis Jauniskis, a spokesman for Energy Minister Arvydas Sekmokas told the Baltic News Service after the Gazprom statement. “These steps don’t help maintain the dialog achieved in the Feb. 27 meeting.”

Unbundling “will go ahead as planned,” Lithuanian Prime Minister Andrius Kubilius said in an interview in Brussels today. “The end of 2014 is for us when unbundling has to be implemented according to our law.”

Kubilius said he had a meeting with Gazprom Export’s Alexander Medvedev on Feb. 27, where both sides agreed that Gazprom will no longer question the unbundling plan.

The government delayed yesterday the deadline for Lietuvos Dujos to prepare the program for unbundling by two months in response to the meeting with Gazprom.

The Lithuanian government asked the European Commission in January last year to investigate possible market abuse by Gazprom after the company said Lithuania, unlike neighboring Latvia and Estonia, won’t receive gas-price cuts because of its unbundling proposal.

To contact the reporters on this story: Stephen Bierman in Moscow at sbierman1@bloomberg.net; Milda Seputyte in Vilnius at mseputyte@bloomberg.net

To contact the editors responsible for this story: Will Kennedy at wkennedy3@bloomberg.net; Balazs Penz at bpenz@bloomberg.net

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