Repeated Lithuanian Shale Gas Procurement Postponed

Having set a new date for a repeated shale gas exploration and mining tender for May or June at latest, the Lithuanian Environment Ministry now is acknowledging it has “hastened” a bit.

“There is still some work to be done on the shale legislation package and the population’s shale-gas-benefits-explaining program has yet to be carried out first before we set a new date. A new tender is most realistic for the summer or even the autumn,” Daiva Matoniene, the Environment deputy minister told Natural Gas Europe.

 As of date, she says, the Ministry along with the Government’s Strategic Planning Committee has made all the necessary shale gas legislation amendments which will be forwarded to the Government and Lithuanian Parliament for approval.

“But the Parliament is ending its spring session and will be able to look through the package only in the autumn session,” reminded the minister, Valentinas Mazuronis.

Chevron, the sole bidder in the last October shale gas procurement, pulled out from it after securing the right to proceed with the quest. The Americans cited adverse tax and legal environment in Lithuania as a main reason of the withdrawal.

The US gas giant was cheesed off by the numerous shale gas legislation changes and especially the Baltic lawmakers’ brewing proposal to tag a 40 percent basic tax on shale gas, which, if adopted, would have been the largest rate worldwide.

 The Ministry suggests exempting future shale has explorers and miners from shale tax for the first three of four years, and thereafter raise it to the average of 12-15 percent.

“We are pursuing the more flexible legislation to have more medium-size reputable companies to sign up for bidding in the repeated tender,” the vice-minister said.

Unlike the minister, Mazurinis, who says familiarizing the public with shale gas benefits is the key thing in the shale endeavor, Matoniene insisted that all “safeguards” ensuring the safety of shale gas exploration and extraction have to be of the utmost importance in the shale legislation.