A tempting offer for Lithuania: gas is twice as cheap, but the commitment can be risky
The gas price curve looks optimistic, but last year it led to historic transformations. A year ago, a megahour of gas cost 60 until August – 350, now it’s about 60 again. Americans offer Europe even cheaper.
“Language is constantly saving Europe. They have a lot of gas, they can extract shale gas,” says the Minister of Energy Dainius Kreivys.
The head of one of the largest US gas companies says that US gas companies are supplying liquefied gas to Europe at half the price of gas this week.
“According to the message and emotion of the moment, this is a low price, twice less than the market price this week,” the head of the Lithuanian Energy Agency assesses. Virgilius Poderys.
But there is a condition – a long-term contract of 20 years or more should be concluded. The association was offered cheaper gas for Lithuania in particular.
“It is clearly said: the price can be really low, but commit to taking gas for 20-25 years to come,” notes D. Kreivys.
Buying gas for residents in LithuaniaInflammation” calls the commitment to buy decades risky.
“At the moment we are moving away from natural gas. Last year, the use in Lithuania decreased by 35%, so committing to buying a specific amount of natural products for 20 years is risky,” says the Ignitis representative. Arthur Kettler.
major gas user “Ahem” indicates that he no longer has long-term contracts, but even when he had, it was not for 20 years.
“Under normal market conditions, the Achema company: signed one- to two-year natural gas supply contracts, negotiating with potential suppliers the quantities and price of natural gas according to the formula. Since last year, due to the unstable situation in the natural gas and energy market, long-term contracts have not been concluded,” comments Ramūnas Miliauskas, CEO of Achemas.
Achema is starting investments to reduce gas, replacing gas with environmentally friendly hydrogen. Thus, the demand for gas in Lithuania in the future may be quite symbolic.
Americans have been offering Lithuania the best price for a long time. US gas dominates the terminal for the third year running. Last year it was 58 percent. of all gas transported to Klaipėda, last year – two thirds, this year even more.
“Lithuania 80 percent receives cargo from the United States. On the one hand, the prices are better, on the other hand, countries are increasing production as much as possible”, says the Minister of Energy.
According to the minister, there is an opportunity for several European countries to conclude a long-term purchase.
“Those will be supplied, which are mainly intended for domestic consumers, and if we put together with these countries, maybe we will do that – we will buy gas with long-term contracts”, he thinks.
The price offered in the US is only now looking attractive. Before Russia’s energy war, gas was even cheaper.
“Twice lower than this one offered.” This is one question – is it a low price in the long term”, V. Poderys assesses.
There is no doubt that first of all, the USA attracts the Germans, who become one of the most important buyers. Having not had a single terminal a year ago, they have already opened and the first American gas arrived.
Even before Russia started a war in Ukraine, I was thinking about what would happen if such a situation arose. Lithuania had long-term contracts with the RussianGazprom.“. The price was political, sometimes one of the highest in the world. Now it is different – almost all of the Russian gas is gone in Europe, Russia has nowhere to put it – they are burning or stopping the wells. And they are sending signals that they would like to renew the gas pipelines, which they stopped by blackmailing them.
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