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Lithuania, Statoil sign LNG deal to end Gazprom monopoly

AFP

The entrance to Norwegian partially state-owned oil group Statoil headquarters, January 18, 2013, in StavangerThe entrance to Norwegian partially state-owned oil group Statoil headquarters, January 18, 2013, in Stavanger

The entrance to Norwegian partially state-owned oil group Statoil headquarters, January 18, 2013, in StavangerThe entrance to Norwegian partially state-owned oil group Statoil headquarters, January 18, 2013, in Stavanger

Lithuania signed a deal with Norway's Statoil on Thursday to supply natural gas to the country's new terminal starting 2015, as the Baltic state strives to cut its dependence on Russian energy.

Under the five-year deal, Statoil will supply an annual 540 million cubic meters to the liquefied natural gas (LNG) terminal on Lithuania's Baltic Sea coast which is due to be completed by the end of the year.

The value of the deal is estimated at 2.5 to three billion litas (700-900 million euros, $1.0-1.1 billion) according to Litgas, the state-owned company in charge of LNG imports.

"It is a big and important step in strengthening Lithuanian energy security," Prime Minister Algirdas Butkevicius told reporters.

"For the first time in Lithuanian history, we will have a permanent alternative natural gas import source."

Russia's state-owned Gazprom is Lithuania's only natural gas supplier under a deal arranged in Soviet times, when Lithuania was part of the USSR.

But Vilnius has been working to diversify its gas suppliers since breaking free from Moscow in 1990 and joining the European Union and NATO in 2004.

In May, Gazprom agreed to a price cut of about 20 percent, after Lithuania filed an international lawsuit.

The first LNG cargo delivery is expected in December, so that the terminal at the port of Klaipeda can start commercial operations in January 2015, Litgas said.

Date created : 2014-08-21