It is proposed to transfer a large part of the losses due to the expensive Equinor LNG to Igničius

This means that most of the losses currently incurred due to extremely expensive Equinor gas will be transferred to the state-controlled Ignitis Group.

Žygimantas Vaičiūnas says that in such a case, gasoline prices for all consumers would drop by several percent from January next year. The additional component of the gas price would only be reduced by about 30%.

The Minister will propose to the Government to reduce the number of required quantities of LNG purchased by Ignitis, a subsidiary of the Ignitis Group, from four to two per year. Under the 10-year contract, the cargo is purchased from the Norwegian company Equinor (formerly Statoil) at a much higher price than on the market.

In addition, the Seimas will be proposed to amend the LNG terminals law and compensate Igničius for up to 10% of the remaining two charges. The difference between Equinor gas and market gas prices. Now gas consumers are making up the total difference by four charges; this year, this amount will reach 25 million. It is expected to rise to 35 million euros next year. euros.

“The package will consist of two parts: the government decides the amount of cargo. (…) In both 2019 and 2020, such cargoes (to support the minimum operation of the terminal – BNS) were not really necessary, they will not be necessary. in 2021, but during the transition period we propose to reduce it to two charges. At that time, due to 10 percent. A decision from Seimas is required to cover the price difference, as it is regulated by the LNG Terminal Law BNS said. Vaičiūnas.

According to him, the cost of essential supply in 2021, if both decisions are made, is projected to reach just 6.5-7 million. euros.

“The next part will depend on the ability of Ignytis and Equinor to review the contract or look for other solutions,” the energy minister said.

“These amendments are aimed at ensuring that the service of supplying the necessary quantity of LNG and guaranteeing the essential operation of the LNG terminal paid for by gas consumers is provided at competitive market prices, and the necessary quantity of the terminal from LNG is obtained in the most profitable way. “

According to Ž. Vaičiūnas, ministers, including Vilius Šapokas, the head of the Ministry of Finance, the Ignitis Group’s largest shareholder, will be introduced to the projects at an informal meeting on Monday.

Ž. Vaičiūnas expects the Seimas decision to be taken at the end of this session, on December 23, then the new procedure would come into effect from January 2021.

“It would also affect the price of gas, a small percentage reduction would be,” said Ž. Vaičiūnas.

According to him, the maintenance costs of the LNG storage vessel will be reduced by about 3.6 million next year. up to € 29 million euros.

Under the agreement signed with Equinor in 2014 and subsequently adjusted, Lithuania committed to purchase the minimum amount of LNG necessary for the operation of the Klaipėda terminal for 10 years: four large ships per year.

Ž. Vaičiūnas told BNS last week that the contract is inflexible. The minister said he had already asked the Norwegian government last year to mediate and change the treaty, but received no response.

Last fall, the government ordered the Energy Ministry to initiate changes to the essential business model of the LNG terminal. Ž. Vaičiūnas then said that the record year 2019 for the terminal and the future gas pipeline to Poland forced him to do so.

The then Litgas (now Ignitis) had already renegotiated the 2014 gas supply contract with Equinor. At the beginning of 2016, the parties signed a renewed agreement: the pricing formula was changed, it was closer to the prices of gas supplied by pipelines, and the annual volume of gas was reduced by about a third from about 5.5 to 3.6 TWh (or 540 million to 350 million cubic meters). , and the contract has been extended until the end of 2024, when the contract for the constitution of independence expires.

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.