Get the latest updates as we post them — right on your browser

. Last Updated: 07/27/2016

Vilnius Signs Gazprom Deal

VILNIUS, Lithuania -- The Lithuanian government Wednesday authorized state-owned utility Lithuanian Gas to sign a long-term gas supply agreement with Gazprom but urged the firm to negotiate better prices.

"The Cabinet suggested the company [Lithuanian Gas] sign a gas supply agreement up to the end of 2005 but the deal should allow for an annual revision of the terms," Economics Minister Valentinas Milkanis told reporters after a Cabinet meeting.

Previously Lithuanian Gas was authorized to sign only a one-year deal.

"For the first half of the year Lithuanian Gas should pay a fixed price and for the second half of 2000 we want the price to be calculated according a formula which takes into account prices for other types of heating fuel," Milaknis said.

Lithuanian Gas was badly hit early this year when sagging mazut prices led to a sharp decline in gas consumption as many of the company's clients switched over to the heavy heating oil.

Gazprom would like to be paid $76 per 1,000 cubic meters of gas but Lithuania hopes to scale that down by "a dollar or more," Milaknis said adding he expected a deal to be signed in Moscow on Friday or early next week.

Lithuanian Gas has said it wanted to buy 1.45 billion cubic meters directly from Gazprom and through intermediaries Stella Vitae and Iteralit next year.

Another 620 million cubic meters will be purchased by fertilizer producer Achema and a further 430 mcm will be transported to Russian enclave Kaliningrad.