Lithuania in talks to buy LNG from Norway and Qatar

Liquefied natural gas tanker LNG
Source: DollarPhotoClub

Qatar and Norway are two possible LNG suppliers to end Lithuania‘s reliance on Russian gas.

Lithuania is close to finalizing a deal with Norwegian energy giant Statoil that would ensure an annual supply of 0.54 billion cubic metres (19 billion cubic feet) of liquefied natural gas from Statoil’s Snoehvit LNG facility to a new LNG import terminal in Klaipeda.

“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. “We plan to complete negotiations in June.”

Statoil confirmed that talks were in an advanced stage, with contract documents pending finalization and approval. Both parties declined to comment on the price of the deal.

According to the Energy Information Agency, Lithuania consumes 120 billion cubic feet of natural gas per year. Ninety per cent of that comes from Russia – a country Lithuania sees as a top risk to its national security. Consequently the government plans to reduce this dependence to 55 per cent in 2016. The deal with Statoil is a good start but Lithuania will have to find other suppliers to complement their energy mix.

On Monday, Dominykas Tuckus told Reuters that the company is planning to sign master trade agreements with multiple LNG suppliers to buy LNG cargoes on the spot market.

Meanwhile, the Prime Minister of Lithuania Algirdas Butkevicius confirmed that negotiations are ongoing with Qatar on the possibility to supply natural gas to Klaipeda’s Liquefied Natural Gas (LNG) Terminal.

Speaking on national radio, Mr Butkevicius said: “Yes, there are talks, it is being discussed. We are working not only with Qatar but also with other countries. I am pleased that the activity developed widely,”

The LNG terminal in Klaipeda is scheduled for completion at the end of 2014. When operational, it will re-gasify around one billion cubic metres (35 bcf) of gas the first year, rising to between 2 and 3 billion cubic metres (70-105 bcf) in the future.

Earlier this month, Norway’s Hoegh LNG agreed to lease a floating LNG import terminal to Lithuania.

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