Gazprom Offers to Cut Prices for Lithuania

Top Russian gas producer Gazprom has offered to cut gas prices to Lithuanian utility Lietuvos Dujos by some 20 percent if it agrees to scrap an arbitration claim, Lithuanian media reported on Tuesday.
 

The Russian giant is offering to drop its current oil-linked pricing for Lietuvos Dujos in favour of the German Eastern border price, or German average gas price (BAFA), business daily Verslo Zinios reported on Tuesday.
 

In exchange, Gazprom wants Lietuvos Dujos to drop its arbitration claim against the Russian company for overcharging it for gas. Negotiations are expected to start on Wednesday after the Lithuanian utility's general shareholders meeting, the newspaper said.

Gazprom, now the sole natural gas supplier to Lithuania and the other Baltic states, is due to face competition from the end of this year, when a liquefied natural gas (LNGLF) (LNG) terminal is expected to come online in the Lithuanian port of Klaipeda.

Gazprom refused to comment. Lietuvos Dujos officials could not immediately be reached for comment.

(Reporting by Andrius Sytas in Vilnuis; additional reporting by Vladimir Soldatkin in Moscow; editing by Jane Baird)