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Norway firm to help Lithuania break free of Russian gas reliance

AFP
AFP - [email protected]
Norway firm to help Lithuania break free of Russian gas reliance

Norwegian company Höegh LNG on Friday signed a deal with Lithuania to build a liquefied natural gas terminal as the Baltic state strives to cut its politically-charged dependence on Russian supplies.

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Under the 10-year lease contract, the offshore unit will be delivered by December 2014, the Lithuanian state-owned energy company Klaipedos Nafta said in a statement.

"The floating storage and regasification unit will help Lithuania to reduce its dependency on a single gas supplier and will grant access to international gas markets," said Rokas Masiulis, director general of Klaipedos Nafta.

Under the terms of the contract, Lithuania is to pay up to $156,200 per day during the lease period.

Thereafter Klaipedos Nafta, of which the Lithuania state owns almost 71 percent, will have the right to purchase the unit and operate it itself.

Currently, Russian energy giant Gazprom is Lithuania's only natural gas supplier, via a pipeline across Belarus.

The two sides are locked in a bitter dispute over pricing and Lithuania's moves to bring in EU-piloted gas market reform legislation, which Gazprom claims will harm its business interests.

Lithuania's reliance on Russia for gas is a legacy of its five decades of Soviet rule, which ended in 1991.

The nation of three million joined the European Union and NATO in 2004 and has rocky relations with Moscow.

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