Victory! Lithuanian energy independence from Russia! Well, no, actually

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Two years ago, President Grybauskaite congratulates her Minister of Energy at welcoming ceremony for the LNG Terminal. The congratulations were premature…

 September 21, 2016 – Fort Russ News –, translated by Tom Winter – 

Gas collapse: Lithuania suffers losses by switching from Russian gas to Norwegian. 

Lithuania is suffering heavy losses, which were the result of an incorrect strategic decision taken by the authorities. It’s about the contract that Vilnius concluded with the Norwegian company Statoil. 

Lithuania planned to buy liquefied natural gas from Norway; the Lithuanian press immediately announced the contract as a victory, and the beginning of gas independence from Russia (previously Lithuania bought its gas from Gazprom).

Rokas Masiulis, Lithuania’s Energy Minister, proclaimed that Lithuania would be the energy center of the Baltic States: Lithuania would procure large quantities of Norwegian gas with the idea of reselling it to the neighboring states, Latvia and Estonia. For these purposes, they even took a long-term lease in a special floating terminal for the reception and storage of LNG (liquefied natural gas).

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At the same time as turning to the Norwegian government for fuel, the Lithuanian government of President Grybauskaite broke off relations with Gazprom, andfiled suit against the Russian oil and gas company in the Stockholm Court of Arbitration. But at the Court, the Lithuanians lost their suit and were completely deprived of Russian gas.

Following this, the hopes to become an energy center of the Baltic States collapsed. The reasons lie in the fact that due to a sharp decline in production all three Baltic states, a large amount of gas is simply not needed any of these countries. At the same under the contract there are minimum amounts that Lithuania must buy from Norway. The real obligation is the Lithuanian 50% share of the minimum amount of the purchases. The hopes of Vilnius  in her neighbors has turned out to be unjustified. 

And Russian gas for Lithuania and Latvia, through a Lithuanian intermediary, turned out to be about 10% cheaper than the Norwegian supply.

The outcomes of this business are very disappointing for Lithuania. Lithuania cannot put to use half of the Norwegian gas in the contract. In addition, the country must keep on making payments for the use of the floating LNG terminal. The attempts of the Baltic republic to become a natural gas energy center have fallen through….

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