Lithuania: Seimas Approves LNG Terminal Amendment Law

On Thursday Seimas of the Republic of Lithuania approved the Law on Amendment to Articles 5, 10 and 11 of the Law on Liquefied Natural Gas Terminal of the Republic of Lithuania.

The Law, inter alia, amends the regulation of trade of natural gas brought through the LNG Terminal, i.e.:

1. The Law abolishes the requirement for the natural gas companies importing natural gas to the Republic of Lithuania through the cross-border interconnection and other natural gas pipelines of transmission system to acquire through the LNG Terminal no less than 25 percent of total quantity of natural gas that such company annually supplies to the natural gas system;
2. The Law establishes that the natural gas brought through the LNG terminal shall be preferred in supply for the purpose of the state regulated generation of electricity and (or) heat. Amount of such gas, equal to the amount of natural gas required for the purpose of ensurance of necessary operation of the LNG Terminal that is approved by the Government, shall be annually allocated based on demand to the producers conducting the business of state regulated energy generation, under the agreements concluded with the designated supplier for the term of 5 years, or under the mutual agreement of the parties, for a longer period of time.
3. The Law also provides the Government with the competence to establish the time period of application of the above mentioned commitment, which may not exceed 10 years as of commencement of operation of the LNG Terminal. Application of such commitment may be suspended or terminated provided a diversified supply and consumption of natural gas as well as security and reliability of the energy supply and safeguard of the consumers’ interests are ensured.

The Law also specifies provisions related to the financing of the LNG Project that should come into effect as of 1 January 2014. The Law establishes that all fixed operating costs of the LNG Terminal, its infrastructure and connection necessary for the ensurance of operations of the LNG Terminal and only those installation costs of the same which are not feasible for financing from other resources available to the company shall be included into the supplementary constituent of the natural gas transmission price for security of the natural gas supply.

The Law shall come into force upon its signature by the President of the Republic of Lithuania and publishing it in “Valstybės žinios” (State News).

Once the Law comes into force the European Commission should adopt a decision regarding further process of the currently suspended pilot procedure regarding potential breach of EU law.

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LNG World News Staff, June 28, 2013; Image: Höegh LNG