In a high-profile visit to Lithuania on Sept. 7, Itera President Igor Makarov said his company, which is registered in the United States but operates mostly in and from Russia, would like to buy a significant stake in Lietuvos Dujos.
Makarov stressed that much would depend on the tender conditions that the Lithuanian government ultimately fixes. He said Itera disliked some of the terms now being considered. However, it had made specific proposals to the Lithuanian government and was keeping all options open.
"We are ready to apply in Lithuania the experience we have gained from our gas sector investments in Georgia and Armenia, in several parts of Russia, and in Estonia and Latvia," Makarov told journalists. Itera controls 24 percent of the Latvian gas company Latvijas Gaze through a Latvian subsidiary, Itera Latvija. It also owns 9.5 percent of Estonia's Eesti Gaas.
As a multinational company with huge and diverse gas resources, Itera "sees no obstacles" in bidding for the 25 percent stake that the government is set to offer a gas producer, or even for the 34 percent stake earmarked for a Western strategic investor, Makarovs told journalists. It might even settle for a smaller stake, as long as that gave it sufficient influence in the company.
Itera would prefer to invest through its Lithuanian subsidiary, Itera Lietuva, which presently supplies about 20 percent of the natural gas consumed in Lithuania. Itera says that in fact it only owns 45 percent of Itera Lietuva. The remaining shares of the intermediary company are held by the managers of the Western Lithuanian Industry and Finance Corporation, a local conglomerate.
Lithuanian Prime Minister Algirdas Brazauskas welcomed Makarov's visit as a sign there would be healthy competition in the gas company sell-off. He and other top officials had previously predicted Russian gas giant Gazprom might be the only gas producer intending to bid, though several Western companies were expected to bid for the strategic 34 percent stake.
"But we do not want to position ourselves as a competitor to Gazprom, which is more of a partner for us," an Itera spokesman told The Baltic Times.
He explained that Itera used the gas giant's pipeline system to deliver its own gas, and that Lietuvos Dujos already has a long-term supply agreement with Gazprom, which must be respected.
Analysts say the two suppliers of Russian natural gas have been working together in Latvia to gain control of Latvijas Gaze and its unique natural gas storage facility. After recent share purchases by Itera Latvija, it and Gazprom together now own a controlling 49 percent stake in the Latvian gas utility.
The Lithuanian government is now finalizing terms of two parallel Lietuvos Dujos privatization tenders. Officials said that while Itera would be very welcome to bid for shares offered to gas suppliers, it would probably not be eligible to bid as a strategic investor.