Gazprom puts offer on table

  • 2003-08-14
  • From wire reports
VILNIUS - A revised bid on the price of a 34 percent stake in the natural-gas utility Lietuvos Dujos (Lithuanian Gas) and a formula for the cost of natural gas supply were submitted by Russia's Gazprom to the Lithuanian State Property Fund on Aug. 11.
The privatization tender commission in charge of the Lietuvos Dujos sale set down to analyze the revised bid immediately, said Nerijus Eidukevicius, commission chairman and deputy minister of economy.
All documents provided by the Russian natural-gas monopoly would also be passed over to Lietuvos Dujos' privatization advisers, the French bank BNP Paribas, Eidukevicius said.
Gazprom had been expected to make its offer in February but backed out at the last minute, citing dissatisfaction with privatization conditions, particularly the requirement to import 70 percent of gas sold by Lietuvos Dujos.
According to preliminary information, Gazprom is offering 91 million litas (26 million euros) for the stake and a 9 million litas premium that will be linked with state caps on gas prices to large industrial users.
In other words, the state will not receive the premium should the caps be introduced prior to the closure of the privatization deal, sources of the daily Lietuvos Rytas reported on Aug. 11.
Initially the Russian concern offered 80 million litas for the 34 percent stake in Lietuvos Dujos.
Last year German companies Ruhrgas and E.ON Energie acquired an identical stake in the gas company for 116 million litas, pledging to pay an additional premium of 34 million litas after several years should state authorities succeed in improving its system of regulating gas prices.
Initially the Lithuanian government had wanted Gazprom to pay a similar price for its stake, though later it said it was willing to negotiate.
Aleksander Ryazanov, deputy chairman of Gazprom, said that the price of gas sold to Lithuania would be calculated under the formula identical to the calculation methods applied for the customers of the European Union states.
"Gazprom sets the price of natural gas for Europe and monitors any changes in the prices of alternative fuels, such as fuel oil, crude and petroleum products. The same approach will be applied to Lithuania," Riazanov said.
Lietuvos Dujos has been subjected to this gas price formula since 2000, with the exception of several six-month periods of fixed prices.
The second stage of Lietuvos Dujos' privatization, which envisions divestment of a 34 percent stake to a gas supplier, was launched more than a year ago.
The state owns a 58.36 percent stake in Lietuvos Dujos, with the consortium of Ruhrgas and E.ON Energie holding a 35.49 percent stake.
Lietuvos Dujos posted a first-half 2003 profit of 19.6 million euros, up by 60 percent compared with the same period last year.
In the six-month period this year the company imported 1.6 billion cubic meters of gas and accoutned for 27 percent of the domestic market.