Lithuania, Gazprom agree ‘significant’ price cut

Lithuania’s gas company said on Thursday it has reached an agreement with Russian giant Gazprom to slash the price of its gas deliveries to the EU state.

“Lietuvos Dujos entered into an agreement with supplier Gazprom regarding a significant reduction in the price of natural gas,” the company said in a statement.

The utility, which has a 40 percent market share in the Baltic state, did not specify the size of the price cut, saying only that it would be passed on to the market soon.

Prime Minister Algirdas Butkevicius said prices could plunge by more than 20 percent between July and the end of 2015 under what he termed the “improved formula”.

“I don’t want to name a precise number today. It could be a 21, 22 or 23 percent (discount). We need to calculate it first, let’s wait a couple of days,” Butkevicius told reporters.

Russia’s state-owned Gazprom is Lithuania’s only natural gas supplier under a deal arranged in Soviet times, when Lithuania was part of the USSR.

Vilnius has been working to diversify its gas suppliers since breaking free from Moscow in 1990 and joining the EU and NATO in 2004.

It expects to complete a liquefied natural gas (LNG) terminal on its Baltic Sea coast by the end of this year and is also in talks with other companies.

Lithuania and Gazprom have locked horns over pricing and moves by Vilnius to implement EU reforms, which bar gas suppliers from also running a country’s pipeline network.

Gazprom owns a 37.1-percent stake in Lietuvos Dujos, while Germany’s EON has 38.9 percent and the government 17.7 percent.