VILNIUS — Lithuanian Prime Minister Andrius Kubilius spurned criticism of his government’s proposed unbundling of the country’s gas company Lietuvos Dujos in a radio interview Thursday.

The company could be unbundled in a move that the energy ministry says will encourage infrastructure development being hampered by current ownership set-up. Lietuvos Dujos is 38.9 percent owned by German company E.ON Ruhrgas International, 37.1 percent owned by Gazprom, Russia’s national gas company and 17.7 percent owned by the Lithuanian government.

The company management is against the [private_supervisor]unbundling proposal and is adamant that the reform will increase gas prices for consumers.

Joachim Hockertz, Lietuvos Dujos commercial director told business newspaper Verslo Žinios that the move was “void and without practical value,” and that the energy ministry’s allegation that the company is holding back infrastructure development to preserve Gazprom’s hold on the market is absurd and designed to manipulate public opinion.

In an interview with the energy market publication ICIS Heren last month, Hockertz said that the government was in fact blocking infrastructure development with excessive taxes, saying that the company proposed building a connection with Poland last year that the government ignored and that the current LNG terminal proposal for Klaipėda is corrupt.

However, in a Wednesday interview with the Alfa.lt news portal, Lietuvos Dujos director Viktoras Valentukevičius called the Polish-Lithuanian pipeline not commercially viable and that a pipeline with Latvia would be better.

Russia unhappy

Lietuvos Dujos are not the only critics of the Lithuanian government’s energy proposals. During the Baltic Sea States Summit this week Kubilius met with Viktor Zubkov, Russian first deputy prime minister and chairman of state-owned Gazprom and Kubilius said Russia is against the Lietuvos Dujos division. Both Gazprom and E.ON Ruhrgas International have said they will use all international legal means to protect their investments in Lietuvos Dujos.

Kubilius said that if Russia has a problem with the proposal, then it should address the European Commission instead of Lithuania.

“As you know, we confirmed that in implementing the European Union’s third energy directive; we will implement it in Lithuania not only electricity but also the gas market” Kubilius told Žinių Radijas. “This means that it will have to be separated from generation, transmission and distribution. Of course, Gazprom, a company concerned about how this will be done. They would like more that nothing be done.”

The country is moving ahead with diversifying its gas sources as the EU has directed it to, the PM said. European Union Energy Commissioner Gunther Oettinger announced his support of the proposed Polish-Lithuanian gas pipeline on Wednesday.

“A European Union directive is a European Union directive; we believe that they are useful for Lithuania. And if any third parties do not like such a directive, they should not discuss it with us, but with the European Commission,” Kubilius said.

Price increase justified

Kubilius also said that the State Prices and Energy Control Commission’s decision to allow the increase in gas prices in Lithuania by up to 20 percent.

He said the commission had taken into account already the firm’s earnings in the first quarter when they approved the 20 percent increase.

The gas company saw profits rise by 144 percent in the first quarter of 2010 because of the shut down of the Ignalina nuclear power plant and the harsh winter.

— Baltic Reports reporter Adam Mullett contributed to this article. [/private_supervisor] [private_subscription 1 month]unbundling proposal and is adamant that the reform will increase gas prices for consumers.

Joachim Hockertz, Lietuvos Dujos commercial director told business newspaper Verslo Žinios that the move was “void and without practical value,” and that the energy ministry’s allegation that the company is holding back infrastructure development to preserve Gazprom’s hold on the market is absurd and designed to manipulate public opinion.

In an interview with the energy market publication ICIS Heren last month, Hockertz said that the government was in fact blocking infrastructure development with excessive taxes, saying that the company proposed building a connection with Poland last year that the government ignored and that the current LNG terminal proposal for Klaipėda is corrupt.

However, in a Wednesday interview with the Alfa.lt news portal, Lietuvos Dujos director Viktoras Valentukevičius called the Polish-Lithuanian pipeline not commercially viable and that a pipeline with Latvia would be better.

Russia unhappy

Lietuvos Dujos are not the only critics of the Lithuanian government’s energy proposals. During the Baltic Sea States Summit this week Kubilius met with Viktor Zubkov, Russian first deputy prime minister and chairman of state-owned Gazprom and Kubilius said Russia is against the Lietuvos Dujos division. Both Gazprom and E.ON Ruhrgas International have said they will use all international legal means to protect their investments in Lietuvos Dujos.

Kubilius said that if Russia has a problem with the proposal, then it should address the European Commission instead of Lithuania.

“As you know, we confirmed that in implementing the European Union’s third energy directive; we will implement it in Lithuania not only electricity but also the gas market” Kubilius told Žinių Radijas. “This means that it will have to be separated from generation, transmission and distribution. Of course, Gazprom, a company concerned about how this will be done. They would like more that nothing be done.”

The country is moving ahead with diversifying its gas sources as the EU has directed it to, the PM said. European Union Energy Commissioner Gunther Oettinger announced his support of the proposed Polish-Lithuanian gas pipeline on Wednesday.

“A European Union directive is a European Union directive; we believe that they are useful for Lithuania. And if any third parties do not like such a directive, they should not discuss it with us, but with the European Commission,” Kubilius said.

Price increase justified

Kubilius also said that the State Prices and Energy Control Commission’s decision to allow the increase in gas prices in Lithuania by up to 20 percent.

He said the commission had taken into account already the firm’s earnings in the first quarter when they approved the 20 percent increase.

The gas company saw profits rise by 144 percent in the first quarter of 2010 because of the shut down of the Ignalina nuclear power plant and the harsh winter.

— Baltic Reports reporter Adam Mullett contributed to this article. [/private_subscription 1 month] [private_subscription 4 months]unbundling proposal and is adamant that the reform will increase gas prices for consumers.

Joachim Hockertz, Lietuvos Dujos commercial director told business newspaper Verslo Žinios that the move was “void and without practical value,” and that the energy ministry’s allegation that the company is holding back infrastructure development to preserve Gazprom’s hold on the market is absurd and designed to manipulate public opinion.

In an interview with the energy market publication ICIS Heren last month, Hockertz said that the government was in fact blocking infrastructure development with excessive taxes, saying that the company proposed building a connection with Poland last year that the government ignored and that the current LNG terminal proposal for Klaipėda is corrupt.

However, in a Wednesday interview with the Alfa.lt news portal, Lietuvos Dujos director Viktoras Valentukevičius called the Polish-Lithuanian pipeline not commercially viable and that a pipeline with Latvia would be better.

Russia unhappy

Lietuvos Dujos are not the only critics of the Lithuanian government’s energy proposals. During the Baltic Sea States Summit this week Kubilius met with Viktor Zubkov, Russian first deputy prime minister and chairman of state-owned Gazprom and Kubilius said Russia is against the Lietuvos Dujos division. Both Gazprom and E.ON Ruhrgas International have said they will use all international legal means to protect their investments in Lietuvos Dujos.

Kubilius said that if Russia has a problem with the proposal, then it should address the European Commission instead of Lithuania.

“As you know, we confirmed that in implementing the European Union’s third energy directive; we will implement it in Lithuania not only electricity but also the gas market” Kubilius told Žinių Radijas. “This means that it will have to be separated from generation, transmission and distribution. Of course, Gazprom, a company concerned about how this will be done. They would like more that nothing be done.”

The country is moving ahead with diversifying its gas sources as the EU has directed it to, the PM said. European Union Energy Commissioner Gunther Oettinger announced his support of the proposed Polish-Lithuanian gas pipeline on Wednesday.

“A European Union directive is a European Union directive; we believe that they are useful for Lithuania. And if any third parties do not like such a directive, they should not discuss it with us, but with the European Commission,” Kubilius said.

Price increase justified

Kubilius also said that the State Prices and Energy Control Commission’s decision to allow the increase in gas prices in Lithuania by up to 20 percent.

He said the commission had taken into account already the firm’s earnings in the first quarter when they approved the 20 percent increase.

The gas company saw profits rise by 144 percent in the first quarter of 2010 because of the shut down of the Ignalina nuclear power plant and the harsh winter.

— Baltic Reports reporter Adam Mullett contributed to this article. [/private_subscription 4 months] [private_subscription 1 year]unbundling proposal and is adamant that the reform will increase gas prices for consumers.

Joachim Hockertz, Lietuvos Dujos commercial director told business newspaper Verslo Žinios that the move was “void and without practical value,” and that the energy ministry’s allegation that the company is holding back infrastructure development to preserve Gazprom’s hold on the market is absurd and designed to manipulate public opinion.

In an interview with the energy market publication ICIS Heren last month, Hockertz said that the government was in fact blocking infrastructure development with excessive taxes, saying that the company proposed building a connection with Poland last year that the government ignored and that the current LNG terminal proposal for Klaipėda is corrupt.

However, in a Wednesday interview with the Alfa.lt news portal, Lietuvos Dujos director Viktoras Valentukevičius called the Polish-Lithuanian pipeline not commercially viable and that a pipeline with Latvia would be better.

Russia unhappy

Lietuvos Dujos are not the only critics of the Lithuanian government’s energy proposals. During the Baltic Sea States Summit this week Kubilius met with Viktor Zubkov, Russian first deputy prime minister and chairman of state-owned Gazprom and Kubilius said Russia is against the Lietuvos Dujos division. Both Gazprom and E.ON Ruhrgas International have said they will use all international legal means to protect their investments in Lietuvos Dujos.

Kubilius said that if Russia has a problem with the proposal, then it should address the European Commission instead of Lithuania.

“As you know, we confirmed that in implementing the European Union’s third energy directive; we will implement it in Lithuania not only electricity but also the gas market” Kubilius told Žinių Radijas. “This means that it will have to be separated from generation, transmission and distribution. Of course, Gazprom, a company concerned about how this will be done. They would like more that nothing be done.”

The country is moving ahead with diversifying its gas sources as the EU has directed it to, the PM said. European Union Energy Commissioner Gunther Oettinger announced his support of the proposed Polish-Lithuanian gas pipeline on Wednesday.

“A European Union directive is a European Union directive; we believe that they are useful for Lithuania. And if any third parties do not like such a directive, they should not discuss it with us, but with the European Commission,” Kubilius said.

Price increase justified

Kubilius also said that the State Prices and Energy Control Commission’s decision to allow the increase in gas prices in Lithuania by up to 20 percent.

He said the commission had taken into account already the firm’s earnings in the first quarter when they approved the 20 percent increase.

The gas company saw profits rise by 144 percent in the first quarter of 2010 because of the shut down of the Ignalina nuclear power plant and the harsh winter.

— Baltic Reports reporter Adam Mullett contributed to this article. [/private_subscription 1 year]

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