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    Achema Challenges Lithuanian Ministry

Summary

The big industrial user is fighting the government over LNG costs

by: Linas Jegelevicius

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Natural Gas & LNG News, Europe, Liquefied Natural Gas (LNG), Corporate, Contracts and tenders, Political, Ministries, Baltic Focus, News By Country, Lithuania

Achema Challenges Lithuanian Ministry

The planned cost reduction for Lithuania's Klaipeda LNG terminal has been postponed at least a month from the July 1 date after Achema, the largest single commercial gas customer in the Baltics and a minority shareholder in Klaipedos Nafta (KN), the terminal's operator, vehemently objected to the ongoing overhaul of the LNG terminal's activity scheme. KN is to set up a company to operate the terminal in order to cut the costs. Achema runs a fertilizer factory in central Lithuania and depends heavily on gas for this.

The new subsidiary would be in charge of the whole LNG terminal's activity related to movable and immovable assets, the  loans and the LNG storage vessel's lease contract. The formal establishment of the company had been planned for June 27, but Achema's representatives did not show up for the signing, explaining later that the draft agreement lacked transparency and did not address Achema’s concerns about possible new financial commitments.

Since then, energy minister Zygimantas Vaiciunas and chairman of the board of Achema Lidija Lubiene have traded insults. Lubiene, who is the majority owner of Achema Group, claimed that the minister used the language of “ultimatums” and that he had threatened to hike the LNG maintenance fee for the company.

She criticised the ministry for failing to follow up on its pledge to cut €4mn ($4.45mn) from the maintenance fees as planned. Last year's fees were €26mn.

Meanwhile, the minister insisted that it was Achema that “puts sticks into the wheel”, resisting the model that he believes is beneficial to Achema in alleviating its burden with the terminal support costs. According to him, any alternatives to the transfer of the terminal's activity would take much longer than the chosen one. Achemos Grupe does not exclude the possibility of going to court, if the interests of minority shareholders are not respected.

Lithuania owns 72.32% of Klaipedos Nafta, and Achema owns 10.41%. Achema did not respond to NGW's requests for information.