Natural gas sector

Overview

Lithuania's gas transmission and distribution network consists of approximately 2,000 kilometres of gas transmission pipelines and 8,300 kilometres of distribution grids.

The Lithuanian gas system is connected with the gas systems of Latvia, the Kaliningrad region of Russia and Belarus. On 27th December 2014 the liquefied natural gas ("LNG") terminal started operating. More than 0.5 billion cubic metres of gas are expected to be regasified during the first year of operation. In 2014 Lithuania consumed 2.55 billion cubic metres of natural gas. LNG terminal creates conditions for more competitive natural gas market and improves the energy security level for the Baltic States by providing an opportunity to have an alternative gas supply source.

Before the start of LNG terminal operation all of the natural gas supplied to Lithuania was sourced only from the Russian company OAO Gazprom ("Gazprom") pursuant to a long‑term supply contract with Lietuvos Dujos, which came into force in 1999 and expires in 2015.  Negotiations with the Norwegian energy company Statoil ("Statoil") were completed and a 5-year LNG supply contract was signed in August 2014. Statoil is viewed as a reliable partner for alternative gas supply to Lithuania, providing Lithuanian's gas market with an opportunity to choose alternative gas suppliers.

Implementation of the Third Energy Package

The implementation of the Third Energy Package in the Lithuanian gas sector was accomplished in 2014 November. It was intended to split generation from transmission and, by breaking up the dominant vertically integrated monopoly, to create competition and increase transparency in the natural gas market. It was also intended to help create a functioning regional gas market in the Baltic States. Legislation was passed to ensure the unbundling of Lietuvos Dujos AB ("Lietuvos Dujos") gas transmission activity by 31 July 2013 and the unbundling of the company's natural gas distribution activity by 31 October 2014. On 1 August 2013, Amber Grid AB, which was unbundled from Lietuvos Dujos, started gas transmission activity and on 1 November 2014 Lietuvos Dujų Tiekimas UAB started gas distribution activity. Lietuvos Dujos is 96.64 per cent. owned by Lietuvos energija UAB.

In March 2012, a natural gas exchange, operated by Baltpool UAB, was established in Lithuania, providing an alternative to bilateral long‑term natural gas purchase agreements. In May 2012, the Seimas adopted the Law on Energy Resources Market, which laid down the legal framework for the establishment of an energy resources exchange and regulates the platform for the trade of biofuels, petroleum product stocks, natural gas and the use of instruments for hedging against energy price volatility. The biomass exchange operations started on 27 September 2012.

Legal acts

• Law on Natural Gas  (not incorporated the following amendments: No. XI-136 of 12 January 2009 and No. XI-353 of 17 July 2009)
• Law on Natural Gas (10 October 2000  No VIII-1973, as last amended on 13 March 2014 – No XII-772)
• Law Implementing the Law Amending the Law on Natural Gas (30 June 2011 No XI-1565)