Kubilius hits back at gas company complaints

  • 2010-09-22
  • From wire reports

Kubilius shot back at the gas company's complaints over a new law endorsed by the government.

VILNIUS - Prime Minister Andrius Kubilius calls the statements regarding the government’s plans to nationalize the assets of gas company Lietuvos Dujos, which were published in several daily newspapers starting Sept. 20, an “unacceptable threat,” reports news agency ELTA.

“This is a publicly expressed threat to disrupt gas supplies if the Lithuanian government implements the EU directives, and such a threat is completely unacceptable and intolerable. I believe that these words will be heard by shareholders of Lietuvos Dujos as well,” Kubilius said.

“The too premature implementation of the ownership unbundling model could lead to disruptions in the supply of gas,” says the statement by E.on and Gazprom.

Lietuvos Dujos has gone public once again with its dispute with the government over the unbundling of the country’s gas supply and network operations, reports market analyst Platts. As a member of the EU, Lithuania is bound by the gas directive that calls for unbundling in some form, and the country’s government has opted for the most extreme of the three forms that the directive allows - ownership unbundling - complains the company.

In an open letter published Sept. 20, the company said the government is in breach of its obligations under international investment protection instruments. “We again call for a halt to the expedited legislative process and for direct and meaningful consultations with the Lithuanian government to discuss all options for amending the draft gas law,” the letter said. It was signed by representatives of the company’s two shareholders, Germany’s E.ON Ruhrgas and Russia’s Gazprom.

The letter also sought to refute allegations that the Lithuanian company was not fostering market development, as well as a number of other statements that the company said were not true.

These claims and statements have been made by Lithuanian politicians over the past few months, the company said, and include suggestions that energy independence may only be reached if the state controls the grid, LD has discriminated against third parties over access, LD has underinvested in the grid, LD has not cooperated with plans to build an LNG import terminal, unbundling will reduce prices, and LD shareholders have been involved in discussions on the new gas law.

With regard to the last point, the letter said, the government approved the concept for implementing ownership unbundling without involving the major shareholders or the company itself. They were invited to a working group, but that only discussed how to implement ownership unbundling and not the alternatives that the directive also offers.
The authors said they have published the letter, as direct and confidential letters to the president, the government and the prime minister of Lithuania, as well as a public appeal to enter into direct constructive talks on implementing the third directive, had all been ignored.

Currently, Gazprom both sells gas to Lithuania and supplies it via Lietuvos Dujos. Gazprom, a Russian state company, is one of the largest shareholders of Lietuvos Dujos.