Norwegian contracts pushing the Russian gas prices – Aftenposten

Norwegian contracts pushing the Russian gas prices – Aftenposten

First, Lithuania signed a long term contract with Hoegh LNG on a floating terminal for importing natural gas. And then came a new agreement with Statoil earlier this year for the supply of significant quantities of gas.

Norway’s increasing role in the energy sector in the Baltic States, particularly Lithuania, has already contributed to that Gazprom has lowered their gas prices to Lithuanian customers . It says Lithuanian Foreign Minister Linas Antanas Linkevičius.

Migrant workers

In Norway, Lithuania has often received attention in recent years because Lithuanian immigrant workers followed by Poles to the Norwegian labor market. Lithuanians have become one of the major groups in the Norwegian labor migration since the millennium.

In Lithuania, however, it is Norway’s role as an energy superpower in Europe and as an investor in Lithuania growing industry that is becoming increasingly important.

The Norwegian vessel “Independence” is used in the Lithuanian port city Klaipeda in the end of next month. The name was chosen by management in Lithuania to highlight that the Norwegian delivery also provides independence for Lithuania in the continuous gas agreements with big brother Russia.

Good timing

Höegh agreement with Lithuania was signed in March 2012 For 30 months ago no one could predict that the tension in Eastern Europe in the meantime would increase so sharply during the change of power, rebellion and Russian intervention in Ukraine. Now comes the Norwegian agreement in the nick of time for Lithuania, where the population is more nervous than ever after Russia’s actions, according to Foreign Minister Linkevičius.

“Independence” is an import terminal for liquefied natural gas (LNG), says CEO Sveinung Støhle in Hoegh LNG, which is listed both in Oslo and New York.

– Our agreement with the Lithuanian government company that is our customer, Lithuania provides two key cards. The country may in the future purchase gas from around the world, while Lithuania’s energy authorities are better able to negotiate commercial terms as those in the future to deal with Russia’s Gazprom, said Støhle.

– Lithuania has hitherto been entirely dependent of gas from Russia. It is not easy to handle a situation where you are totally dependent on a monopoly. In Lithuania we have not been satisfied with this situation. In agreement with Statoil and the new LNG terminal, we see, however, that the new realities affecting the entire energy policy situation for us, including prices. It helps us, said Mr Linkevičius.

Hoegh LNG will be responsible for the operation of “Independence”. The agreement is for a period of 10 years. The lease provides probably Hoegh a three-digit millions in annual income. The new building, however, cost the owner approximately $ 350 million (1.8 billion).

Large capacity

The terminal will have a capacity to receive four billion cubic meters of gas per year, while the total the need for such energy in Lithuania is estimated at 2.7 billion cubic meters.

The terminal will thus exceed the domestic demand by a wide margin. It can allow for that gas can also be transported from Lithuania to neighbors who want alternative energy sources for Russian gas. Lithuania’s government does not deny that the country wants to get in a position where one can convey gas to neighboring countries in the Baltic States or Poland for example.

Published: 28.sep. 2,014 9:49 p.m.