Replacing its desire to sell 24 percent of the company, the state is now seeking a strategic investor to manage the company. That investor will have to buy at least 34 percent of the company to meet the criteria of European and trans-Atlantic integration.
The state will retain between 34 and 51 percent of the company. The remainder of the company will be sold to other investors meeting the same requirements.
Two sister companies, liquefied petroleum company Suskystintos Dujos and gas units Dujiniai Irenginiai, would also be separated from the company, and a new gas law describing the gas market, prices and access regulation principles will be developed.
A new tender seeking an advisor for the privatization is also forthcoming. Those participants that took part in the tender for an advisor for the 24 percent shares emission have been invited.
"So one tender turns into another," said Arturas Baublys, spokesman for the Economy Ministry. That advisor would have to invent the tender for privatization – a situation that would mirror the Lietuvos Energija plan, he added.
The timetable for this privatization was the subject of some agreements, although Prime Minister Andrius Kubilius appears to have appeased the opposition, insisting that the privatization process must be started this year. "As usual the opposition said that Lithuania must not be in a hurry for privatization. But the Prime Minister explained to them that if privatization does not begin this year or the beginning of next year, the financial situation will get dangerous for this company," said Audras Baciulis, spokesman for the prime minister.
Another item of some contention has been the question of whether to privatize the gas lines, which the prime minister supports. "Gas companies in small states are interesting for investors only if the gas lines are sold together with the company," Baciulis said.
But the overwhelming concern was how to keep Lietuvos Dujos out of the grasp of Russia's Gazprom. One the principals agreed on by the government that the strategic investor must meet an obligation regarding Lietuvos Dujos' integration into the EU GasNet system.
"Gas de France is the best [potential] investor," said Jonas Valatka, MP from the Social Democracy 2000 party. "Our state needs, if necessary, to get gas not only from Gazprom."
The key, Baublys said, is getting Western-minded people to manage the system. "Now the main opportunity is break the corruption in the system and, make the companies profitable again. After that the society and the state would gain. In the meantime, new management, new professionals will come. If we really want to join the West we have to bring into those companies people who have Western perspective. You cannot build a power bridge to the West with people who don't believe in that. And behind all of this, we need to change the people, both corrupted and people who don't believe in the disconnecting with the Soviet Union."
The most worrisome aspect of the privatization is that, in the case of the privatization of Lietuvos Telekomas, consumers will feel the first pains of change. "The consumers will suffer first. But in the long run after reorganization and really turning to the West, I think this will become more optimistic," said Baublys.
One thing that seems certain at this point: Once the privatization tender is announced, the investors will come. Leif Zierz, head of the utilities team for KPMG corporate finance, expects a huge interest of large European gas companies.
"The big gas companies throughout Europe are coming from a monopolist world, and liberalization is coming up, and so the only thing that they can do in their domestic markets is lose market share. If they want to grow and continue being profitable they have to go abroad. Therefore they are looking at Eastern Europe, and the Baltics, as well as Poland and Czech Republic are the first choice, because they have gone a certain way," Zierz said.