Milda Aleknonytė | The Lithuania Tribune
The fertilizer producer Achema sent a letter, addressed to the European Commission early this September, asking for clarification as to whether the Liquefied Natural Gas Terminal Law is compatible with the competition law. The Liquefied Natural Gas Terminal Law states that licensed gas suppliers will be obliged to buy at least 25% of their consumed gas from the soon to be opened gas terminal.
Achema is Lithuania’s top gas consumer. In the worst case scenario, the maintenance costs of the future LNG terminal would be added to the gas transmission rates, adding these extra costs to the company, which would total up to around 100 million litas, Valdemaras Vareika, CEO of Achema told BNS.
Although, it is not only the direct consumers that are complaining: Vytautas Stasiūnas, president of the Association of Gas Suppliers, told Alfa.lt that “The price [of gas] may be lower with another supplier, but we will have to buy the more expensive one.”
Moreover, Mr. Stasiūnas also mentioned, that it is not the only appeal to the European Commision. The LNG provisions also mention, that all infrastructure costs of the gas terminal, such as ship costs, are calculated with the natural gas network maintenance costs. According to him, this means that the cost of gas will increase, thus increasing the price, meaning the heating prices for consumers will raise.
On the other hand, Arvydas Sekmokas, the Lithuanian Minister of Energy stated that the obligatory 25% consumption rule will in fact promote competition. Back in April, he told journalists that “The 25 percent intend to create a market quicker. Right now, Gazprom poses a requirement in their negotiations that suppliers commit to buy 100 percent of their natural gas from Gazprom. This would prevent competition in the market.” Currently, Achema has a long-term contract with Gazprom.
While suppliers say that the LNG terminal will raise gas costs and are therefore scaring consumers that heating costs will raise, the LNG terminal is expected to open only at the end of 2014. Meanwhile, heating prices for consumers have risen by 22 percent in July 2012.
Therefore, whether the new terminal is a reason, or an excuse to raise heating costs is still to be determined.