LITGAS Inks Initial LNG Deal with Statoil

On Aug. 21, UAB LITGAS (part of Lithuania’s Lietuvos Energija energy group) signed a contract with Norway’s Statoil to supply the minimum volume of LNG necessary to continuously operate Lithuania’s floating storage and regasification unit (“Independence”) that will become fully operational on Jan. 1, 2015, at the Port of Klaipėda on the Baltic Sea.

Under the terms of the contract, Statoil is to provide LITGAS with 0.54 billion cubic meters (bcm) of gas per year for a five-year period at a price pegged to Britain’s National Balancing Point (NBP) gas hub. Again, it would be difficult to overstate the significance of this development for Lithuania and the greater Baltic region:

For the first time since regaining its independence in 1990, the Republic of Lithuania will have a second source of natural gas, a commodity that provides more than a third of the nation’s overall energy needs. Moreover, the terminal could supply 75 percent of the combined natural gas demand in Lithuania, Latvia, and Estonia.