AP News

Lithuania hits Gazprom with $1.9 billion claim


VILNIUS, Lithuania (AP) — Lithuania's government said Wednesday it planned to file a €1.45 billion ($1.9 billion) claim against Russia's Gazprom, alleging that the world's largest natural gas company has hiked prices unfairly.

Government ministers said the size of the claim covers what the country has overpaid for natural gas since 2004, when Gazprom obtained a major stake in Lietuvos Dujos, the country's largest gas importer, and changed the formula for determining the gas price.

Prime Minister Andrius Kubilius noted that German and Polish companies have also initiated legal action against Gazprom. "In this respect Lithuania is following suit. We have had several talks with Gazprom management and presented clear arguments, but to no avail," he told reporters.

Lithuania imports all its natural gas from Russia and has become more dependent on its eastern neighbor after closing a Soviet-era nuclear power plant in 2009. Since then, Lithuania has paid up to $490 per 1,000 cubic meters of gas, far higher than other European countries, according to the Energy Ministry. Lithuanian consumers, in turn, have seen their monthly energy bills soar.

Kubilius' conservative government struck back at Gazprom earlier this year when it spearheaded legislation "debundling" the gas market — separating suppliers from the distribution network— starting in 2014. The measure, taken in accordance with a European Union-led effort to foster more competition, will force Gazprom to give up control over some of its key assets in the Baltic state.

Meanwhile, the European Commission, the EU's executive arm, last month launched a probe to find out whether Gazprom blocked competition in gas markets in Central and Eastern Europe. Gazprom blasted the move as undue pressure on the company to change its prices.

Lithuania's claim will be submitted to a Swedish arbitration court.


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