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These losses are now borne by all gas consumers, but there is a desire to change this practice, says the Minister of Energy. Some experts doubt that it is possible to change the contract with the Norwegians, and other solutions would mean that all or part of the contract losses would be transferred to the Ignitis Group, whose subsidiary Ignitis has a contract with Equinor.
Under this agreement, signed in 2014 and subsequently adjusted, Lithuania committed to purchase the minimum quantity of LNG necessary for the operation of the Klaipėda terminal for 10 years: four large ships per year.
Energy Minister Žygimantas Vaičiūnas believes that decisions could be made this year.
“We can also get into an area or situation where the maintenance costs of the entire terminal can similarly reach the cost of four essential supplies per year. This is definitely not logical here and therefore the necessary action on this issue will be too, ”said BNS. Vaičiūnas.
The minister says that he does not take into account the circumstances of the signing of the contract, but, in his words, is inflexible.
“We have a problem or situation where there are four mandatory gas supply charges per year and they actually cost significantly more than in the gas market (…) This contract, which was concluded in 2014 and subsequently revised, is certainly not good for consumers in our gas market, and it generates quite large losses (…) The contract of the Norwegian company is inflexible ”, explained the minister.
Ž. Vaičiūnas stated that he had already asked the Norwegian government to mediate last year, because “the situation must be resolved one way or another.”
“We have made our suggestions as to whether this could be a review of the contract itself or if there could be other solutions related to the optimal performance of this contract,” he told BNS.
According to Ž. Vaičiūnas, if there are no “more active signals or actions” by the Norwegian company in the near future, action will be taken at “national level”. He did not detail future decisions, but said he expected them to be made later this year.
The minister recalled that last year Klaipedos Nafta borrowed 134 million LTL from the Nordic Investment Bank (NIB). The terminal’s rental and maintenance costs were spread throughout 2044 and this resulted in a decrease in the price of gas for consumers from the beginning of this year.
“The second element is the mandatory or mandatory supply of gas under this contract. We will probably have to pay between 36 and 38 million for the terminal (boat rental and maintenance – BNS) this year. The loss for this contract (with Equinor – BNS) was at least 20 million euros at least last year. I’m not sure I can say the amount publicly, but it is definitely not less, ”said the energy minister.
The energy experts, who did not want to reveal their names, told BNS that negotiations with Equinor on a contract review had not taken place this year; the Norwegian company had previously refused to negotiate. However, they point out that the government has not yet approved the required amount of LNG for next year or 2021-2024.
“This would be a change in the regulatory regime and it would set a terrible precedent if it were tried to pirate it ahead of time, because it is a commitment of the State. “Litgas (currently Ignitis – BNS) did not think of buying it for 10 years, it was an obligation of the Government,” said the expert, who did not want to make his name public.
The government set the required amount of LNG in 2014 for five years, but last fall it was approved for only one year, at the same time instructing the Ministry of Energy to initiate changes to the model to ensure the necessary operation of the LNG terminal. The required quantity of LNG for 2021-2024 has not been approved as of yet.
Virgilijus Poderys, chairman of the Seimas Sustainable Development and Energy Commission, told BNS that he was not yet informed about the intentions to optimize these LNG terminal maintenance costs.
“Unfortunately, the Minister has not yet informed us, neither I nor other members of the Energy Commission, the Economic Committee. In principle, I was aware of these plans, but I have not seen such a project (…) Yes, indeed, depending on the formula or by agreement, Lithuania pays more than 20 million LTL every year for molecules alone. “, said V. Poderys.
“If the minister takes the initiative and has decisions, that is very good,” he said.
Ž. Vaičiūnas said a year ago, when the government decided to initiate changes to the operating model of the LNG terminal this year, that the record year 2019 for the terminal and the future pipeline to Poland forced it to do so.
The then Litgas had already renegotiated the 2014 gas supply contract with Equinor. In early 2016, the parties signed a renewed agreement: the pricing formula was changed, it approached the prices of gas supplied by pipelines, the annual volume of gas dropped by about a third from about 5.5 to 3.6 TWh, and charter for Independence.
In early 2016, it was announced that due to the modification of the agreement with Equinor, the price of LNG will decrease by more than a third, from 27-30 euros to 16-20 euros per megawatt-hour, the maintenance costs of the terminal LNG will decrease by approximately 23% and purchased LNG by 540 mln. up to 350 million cubes annually.
However, with the significant drop in LNG prices on the world market in recent years, Equinor gas has become much more expensive. Based on the terminal’s capacity model, Ignitis sells gas to market participants at an average market price and the difference between the market and Equinor’s gas prices is offset by the terminal component, paid by all consumers. Of gas.
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