VILNIUS - Lietuvos Dujos (Lithuanian Gas) announced last week that it would expand its capacities of gas mains Minsk-Vilnius-Kaunas-Kaliningrad. The deal calls for the construction of an additional pipeline from Kaunas, Lithuania's second-biggest city, to the country's border with Kaliningrad by the end of 2005.
To secure an annual supply of 1.05 billion cubic meters of natural gas to the isolated Kaliningrad province, Lietuvos Dujos, which is controlled by German and Russian investors, has been entrusted to serve as the main contracting authority for the expansion of gas mains starting in 2006.
The media earlier reported that Lietuvos Dujos would be the owner of the new pipeline, which could be financed by either Gazprom alone, or by all shareholders. In the latter case, the company would have to increase natural gas prices to cover the investment costs.
During his last meeting with Russia's Premier Mikhail Fradkov, Lithuania's Prime Minister Algirdas Brazauskas noted that his government was ready to discuss either the expansion of existing pipelines or the building of a new pipeline to the Russian exclave. An option of laying a branch line to Poland and Germany was also mentioned.
The board of Lietuvos Dujos contains two representatives of Germany's Ruhrgas, two of Russia's Gazprom and one appointed by the government.
While Ruhrgas owns 35.69 percent of Lietuvos Dujos, Gazprom holds a 34 percent stake, and 24.36 percent of the stock is in the state's hands.
The current annual supply of gas to Russia's exclave totals approximately 500 million square meters.
Earlier this year the government sold a 34-percent stake in Lietuvos Dujos to Gazprom, the world's largest natural gas producer.
