Butkevicius hopes that Lithuanian Parliament will adopt amendments to the Law on the LNG Terminal

Wednesday, 21 October 2015

Prime Minister Algirdas Butkevicius hopes that Parliament will adopt amendments to the Law on the Liquefied Natural Gas (LNG) Terminal. Otherwise, heating prices for consumers will grow, he says.

On Tuesday the Lithuanian Parliament will vote for the second time on whether to deliberate about the LNG terminal sustenance rules. The prime minister told the national radio that politicians are lacking information on the matter.

"I think common sense should prevail and the Law on the LNG Terminal should pass," said the head of Government.

Butkevicius emphasised that if the law is not adopted, then the existing LNG terminal's operation model would remain in effect, based on which heat and electricity producers have to consume the whole volume of gas provided by the LNG terminal. However, the existing model is no longer viable due to the changes in Lithuania's energy market. The demand for natural gas is decreasing rapidly due to the expansion of cheaper biofuel for heat generation. The ongoing renovation of residential buildings has also contributed to this as it helps save heat. Another factor that brought changes to the energy market is the shift from uncompetitive quota-based electricity generation.

As a result, according to Butkevicius, if the existing law continues to be applied it will severe consequences as far as gas prices for businesses and heating prices for consumers are concerned. The prime minister gave the city of Vilnius as an example, where heating prices could soar by 22 percent.

"Meanwhile, if the law is adopted, I can assure you that heat prices essentially would not rise in Lithuania, whereas in Vilnius they should decrease by up to 5 percent both for residents and businesses," said the head of Government.

As reported, the Cabinet of Ministers has asked Parliament to consider the amendments as a matter of urgency. Following the proposal, the LNG terminal's sustenance cost would be distributed between all consumers who would pay based on the projected maximum daily capacity.

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