A Review of the Nigerian Energy Industry

Gazprom ‘contests $48m Lithuania fine’

Gazprom01 July 2014, News Wires – Gazprom has challenged a $48 million fine slapped on the Russian gas monopoly for allegedly hindering competition in the Lithuanian utilities market, according to a report.

The Moscow-based giant has contended that the fine, handed down last month by the Baltic state’s Competition Council, violates international agreements in the European Union, Reuters reported.

Gazprom filed a petition with the Vilnius Regional Administrative Court on Monday, also contesting the size of the fine, the news wire reported, quoting a court spokesperson.

Lithuanian authorities accused Gazprom of of violating a merger agreement with state-owned gas player Lietuvos Energija in 2004. The body found that Gazprom prevented Lietuvos Energija from negotiating with other natural gas sellers, insisting the Russian “formed a barrier to the (Lithuanian) company to buying natural gas from another supplier”.

Gazprom’s action had prevented the state player from purchasing cheaper gas for electricity and heating, the council said.

The Russian company was hit with a fine of 123.1 million Lithuanian litas ($48.29 million).

Soon after the fine was imposed, Gazprom accepted an offer from Lithuanian players to sell its stake in gas supplier Lietuvos Dujos and gas pipeline operator Amber Grid.

Under the terms of the offers, Gazprom is expected to receive about $95 million for its 37% stake in Lietuvos Duos from locally registered Lietuvos Energija and about $69 million for the 37% shareholding in Amber Grid from Lithuania’s state-owned Epso-G.

Before the agreed sale, Gazprom was the monopoly gas importer to Lithuania, supplying about 2.7 billion cubic metres to the country last year.

However, Russian gas deliveries to Lithuania may dry up as soon as next year as the country is rushing to commission its LNG import terminal, the first ever facility of such a kind in the former Soviet Union area. The project is centered on a floating storage and regasification unit in Klaipeda, allowing Lithuania to import up to 4 Bcm of gas per year.

Lithuania is also hoping to export some gas to neighbouring Latvia and potentially to Poland, as its current annual gas consumption stands at about 3 Bcm.



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