Lithuanian Gas Utility Dujos Renegotiating Gazprom Supply DealBryan Bradley
Lithuanian gas utility Lietuvos Dujos AB plans to extend a supply agreement with OAO Gazprom that expires in 2015 for five years or more if the Russian company, its partial owner, agrees to lower prices and amounts.
“We’re in negotiations about extending the contract while changing some parameters,” Dujos Director Viktoras Valentukevicius told reporters today in Vilnius, the Lithuanian capital. “It would be for a period sufficient for us to assess changes and risks in the market, I think at least five years.”
Seeking to diversify its gas options, Lithuania is building a floating liquefied natural-gas terminal on the Baltic Sea, scheduled to start work in late 2014, and seeks to build a gas pipeline link with neighboring Poland. Valentukevicius said Dujos, of which Gazprom owns 37 percent, handles almost 40 percent of gas used in the Baltic nation.
Dujos wants to end a direct link between “speculative” world crude oil prices and what it pays for gas supplies, Valentukevicius said. The talks were separate from those Lithuania’s government is pursuing with Gazprom, he said.
Shares of Lietuvos Dujos rose 2 percent to 0.622 euro at 1 p.m. in Vilnius, the highest since trading resumed on July 2 after the spinoff of the utility’s transmission activities to a new company. Volume of 31,908 shares was more than triple the three-month daily average, data compiled by Bloomberg show.
Lithuanian Prime Minister Algirdas Butkevicius has said the country should avoid signing a long-term supply agreement with Gazprom. The government owns 18 percent of Dujos and Germany’s EON AG owns 39 percent.
In October, Lithuania’s previous government filed a lawsuit against Gazprom in a Stockholm arbitration court for 5 billion litai ($1.9 billion), the amount the country says it was overcharged for supplies since 2004. That followed the EU’s announcement in September, and partly at Lithuania’s request, of an antitrust probe regarding the Russian company’s pricing for gas sales in central and eastern Europe.