Lithuania Won't Be Bullied By Gazprom

Lithuania will not bow to pressure from Gazprom, the sole pretender for 34 percent of gas utility Lietuvos Dujos, and could delay the sale if the gas giant offers too little for the stake, the government said Thursday.

Gazprom and a Lithuanian partner, gas distributor Dujotekana, on Tuesday submitted the only application to bid in a tender for the Dujos stake.

Local media reports cited officials of the Russian firm saying they would offer significantly less than the price a German consortium agreed to pay in May for an equal stake in the utility. Ruhrgas and E.ON Energie paid 116 million litas ($33.78 million) for their 34 percent stake in Dujos, placed another 34 million litas in an escrow account that the government could draw after meeting certain conditions and pledged to invest 70 million litas in a new issue of Dujos shares.

"I'd think the price should be close to what the Germans paid," Economy Minister Petras Cesna told a news conference. "If they now offer a very low price, what forces us to sell? Maybe over time the price will increase," Cesna said. "With the Western strategic investor on board there is already a certain stability and we are no longer alone negotiating with Gazprom, so now it's easier to resist the psychological pressure we have long felt regarding this privatization and still feel," the minister added.

But he noted that official talks had not yet started with Gazprom, which he hoped could help ensure stable gas supplies and prices as well as "more political reliability," given that the Russian government has not yet signed a long-term gas-supply treaty with Lithuania.

The former Soviet Baltic state does not yet have a link to the west European gas grid.

Lithuanian authorities on Thursday asked Gazprom to clarify certain aspects of its application before it could be approved to bid in the Dujos tender. Dujotekana has said it was aiming to acquire 9 percent of the gas utility while its Russian partner would buy 25 percent, as required by tender conditions.

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&to=http://www.dujos.lt/' target=_blank>Lietuvos Dujos

&to=http://www.gazprom.ru/eng/default.htm' target=_blank>GAZPROM