EU approves state aid for Lithuania’s Klaipėda LNG terminal

EPA/VALDA KALNINA/FILE PICTURE

The Liquefied Natural Gas (LNG) carrier and floating storage and regasification unit (FSRU) Independence arrives in the port of Klaipeda.

EU approves state aid for Lithuania’s Klaipėda LNG terminal


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The European Commission said on October 31 that the EC has approved under EU State aid rules the compensation granted by Lithuania to LITGAS for supplying a mandatory quantity of liquefied natural gas (LNG) to the LNG terminal in Klaipėda.

In November 2013, the Commission approved under EU State aid rules an aid scheme to support the construction and operation of an LNG terminal at the Klaipėda seaport in Lithuania.

In June 2018, Lithuania notified the Commission of certain changes to the aid scheme approved in 2013, namely: the decision by Lithuania in 2016 to entrust LITGAS, a liquefied gas supplier, with a public service obligation to ensure the supply of a mandatory quantity of liquefied natural gas to the LNG terminal in Klaipėda. In exchange, LITGAS receives compensation from the Lithuanian State to cover the costs incurred for performing this public service obligation; and the removal of an existing purchasing obligation.

As part of the support scheme approved by the Commission in 2013, Lithuania introduced a “purchase obligation” whereby heat and electricity generators were obliged by law to purchase a certain quantity of gas from LITGAS.

However, taking into account the developments on the gas market, Lithuania considers that, as of January 2019, the purchase obligation will no longer be necessary and can be abolished.

The Commission said the EC assessed the changes to the Lithuanian aid scheme under the EU State aid rules on services of general economic interest (SGEI) and found that the modifications to the initial scheme, in particular the removal of the purchase obligation, will contribute to enhancing competition on the Lithuanian gas market. Moreover, the Commission said, Klaipeda seaport will contribute to the EU’s Energy Union objective to reduce energy import dependency by diversifying supply and creating a fully interconnected EU wide energy market.

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