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UPDATE 1-Lithuania nears LNG deal with Statoil
May 26, 2014 / 2:00 PM / 3 years ago

UPDATE 1-Lithuania nears LNG deal with Statoil

* Litgas says has already agreed on the commercial terms

* Expects to complete negotiations by end-June

* Plans to import more than 0.5 bcm annually for five years

* Russia’s Gazprom is sole gas supplier currently (Adds Statoil, Litgas confirmation, deal details)

OSLO, May 26 (Reuters) - Lithuania is close to signing its first liquefied natural gas (LNG) purchase with Norway’s Statoil , the prime minister and energy companies said, which would end Russian firm Gazprom’s monopoly as its supplier.

The deal, if finalised, would help the Baltic state reduce its total dependence on pipeline gas imports from Russia, its former master in the Soviet Union, which Lithuania sees as a top risk to its national security.

“We have agreed on the main commercial terms (with Statoil), and we are now negotiating the technical details,” Dominykas Tuckus, the head of Litgas, a gas trading arm of state-owned energy group Lietuvos Energija, told Reuters on Monday. “We plan to complete negotiations in June.”

Statoil confirmed that talks were in an advanced stage, with contract documents pending finalization and approval.

“We want to finalise the deal as soon as possible, with the first deliveries starting in January 2015,” Morten Eek, a spokesman for Statoil, said.

Qatar was one of the bidders, but Prime Minister Algirdas Butkevicius said he authorised Litgas to continue talks with Statoil.

Litgas earlier said it was negotiating a five-year deal to import 0.54 billion cubic metres (bcm) of gas annually via a new LNG import terminal at Klaipeda port city starting from 2015.

Statoil said the volume would be 0.55 bcm per year, which amounts to six to seven LNG cargoes. Eek declined to comment on the price.

Tuckus said the LNG price agreed with Statoil would not be fixed but would “reflect the trends in the global gas market”.

Litgas was also planning to sign master trade agreements with multiple LNG suppliers to buy LNG cargoes on the spot market, he added.

Statoil’s Snoehvit LNG facility, Europe’s only liquefaction plant, processed about 4 billion cubic metres (bcm) of gas in 2013, while Lithuania’s total gas consumption amounted to 2.7 bcm last year. Snoehvit mainly delivers LNG to Europe and Asia.

Norway’s Hoegh LNG earlier agreed to lease a floating LNG import terminal to Lithuania. (Reporting by Nerijus Adomaitis; additional reporting by Andrius Sytas in Vilnius; Editing by Balazs Koranyi and Jane Baird)

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