Lithuania, Gazprom hold talks on price, reforms

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Lithuanian negotiators sat down with envoys of Russian gas giant Gazprom Friday, Lithuania's energy ministry said, amid wrangling over an alleged breach of contract and market reforms.

In a statement, the ministry said that the two sides had discussed the pricing policy of Gazprom, Lithuania's sole gas supplier.

It also said that talks focused on Lithuania's drive to respect new European Union gas market rules, which Gazprom has faulted.

The two sides have agreed to continue discussions, the statement added.

On March 3, Lithuania threw down the gauntlet by warning that unless Gazprom came to the table within 60 days, Vilnius would seek international arbitration.

It has accused Gazprom of unfair pricing and putting political pressure on the Baltic nation's government. The Russian group has denied the claim that it is abusing its market clout.

Gazprom signed a contract in 2004 that gave it a 37.1-percent stake in Lithuania's gas distributor Lietuvos Dujos.

The battle has centred on Lithuania's drive to respect new rules on "unbundling" countries' gas systems -- separating bulk supply from that piped to consumers.

Gazprom and another major Lietuvos Dujos player -- E.ON Ruhrgas International from EU member Germany, which owns a 38.9-percent stake -- have pressed Lithuania to seek an exemption from the reform.

But the Lithuanian government, which holds 17.7 percent of Lietuvos Dujos, has refused.

In January, Lithuania asked the European Commission to probe the issue.

Lithuania, is seeking to cut its dependence on energy from Russia, a legacy of its five decades as a Soviet republic before the communist bloc collapsed in 1991.

© 2011 AFP

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