Lithuania’s biggest gas consumer Achema looks to sign long-term supply contract

Achema now purchases gas from two suppliers, Russia’s Gazprom and Norway’s Statoil, for the first time in the company’s history.

Achema’s head Ramūnas Miliauskas says the company is negotiating with seven liquefied natural gas (LNG) suppliers on purchases starting in 2017 and is also holding talks with Gazprom.

Achema does not have any long-term gas supply contract after its 10-year contract with Gazprom expired in late 2015.

“We don’t think we are going to sign a 10-year contract, like we did with Gazprom. The market has changed and long-term contracts of two to three years are now a normal practice in the world,” the CEO told BNS when asked what kind of gas contract would be acceptable to Achema.

“We’ll see who offers better terms. We may diversify our gas supplies. When we have all the offers, we’ll discuss them and then we’ll see,” he added.

The fertilizer manufacturer could purchase LNG from the United States, provided that it is suitable for its production, Miliauskas says. Gas of high calorific value, which is suitable for the energy sector, is not suitable for fertilizer manufacturers.

Achema uses around 1.2 billion cubic meters of gas annually. Last February, the company signed a contract with Statoil to purchase around 700 million cubic meters of Norwegian gas by October. Before that, it used exclusively Gazprom’s gas.