* Eyes gas link to Poland by end-2017
* New energy strategy expected in May
* Gazprom to remain key gas supplier
By Nerijus Adomaitis
OSLO, Jan 11 The new energy minister of the
small Baltic state of Lithuania wants talks to ease a
confrontation with Russian gas giant Gazprom but will
stick to European Union plans for gas market deregulation which
have angered Moscow.
Jaroslav Neverovic, who became energy minister in December,
said the problems could be resolved around the negotiating
table, a change in tone to the more forceful rhetoric of the
previous centre-right Lithuanian government.
"We want to solve all disputes and we see a possibility of
doing that, because Gazprom has demonstrated a constructive
approach during our first meeting," Neverovic told Reuters in a
telephone interview from Lithuania's capital city Vilnius.
He was referring to a meeting with Alexander Medvedev, the
head of Gazprom's export arm, in December.
The government has said it plans to have more talks with
Gazprom in January, but no dates have been set yet.
"We have to be realistic and understand that even when
competition is introduced to the market, Gazprom is going to
remain the key gas supplier," Neverovic said, referring to plans
for a liquefied natural gas (LNG) terminal to ease Lithuania's
dependence on gas from Russia, which ruled the Baltic state
until 1990 but still supplies Lithuania with all its gas needs.
Lithuania angered Russia by deciding, in accordance with EU
guidance, to separate gas supply and transportation of gas
utility Lietuvos Dujos, majority controlled by
Gazprom and Germany's E.ON.
Gazprom took Lithuania to an international arbitration court
in Stockholm, though it eventually acquiesced to the market
Lithuania has in turn launched a 5 billion litas ($1.9
billion) claim at the Stockholm international arbitrage court
for Gazprom allegedly overcharging it for gas.
"All arbitration questions will be dealt with as a part of
negotiations," Neverovic said.
Gazprom also faces pressure from the European Commission,
which has launched an investigation into suspected
anti-competitive market practices.
Despite his readiness to talk, Neverovic said unbundling
remained a key tool to free up the market.
Gazprom is also facing potential competition from LNG as
Lithuania tries to diversify supplies by building a 2-3 billion
cubic metres per year import terminal by the end of 2014.
The Baltic state is also eyeing a gas link to its neighbour
Poland, which also plans to start LNG imports in the second half
of 2014 and is exploring for shale gas.
The minister said the planned gas link to Poland could be in
place by the end of 2017, and that he would travel to Warsaw
this month to push for the project.
Warsaw-educated Neverovic was delegated to the coalition
cabinet by a junior partner, a party of ethnic Poles in
Lithuania, and he is therefore seen by the Lithuanian media as
the right person to improve energy cooperation with Poland.
Polish and Lithuanian gas companies have estimated the 562
kilometre link of 2.3 billion cubic metres of annual capacity
could cost 471 million euros ($622.36 million). A feasibility
study is expected to be ready in the first quarter of 2013.
Neverovic said plans for a regional nuclear power plant,
blocked by a referendum last year, could be resurrected this
year in a new energy strategy due to be presented in May.
The previous plan had involved buying a reactor from Japan's
Hitachi Ltd and investment from Estonia and Latvia.
"If we reach an agreement between all political parties that
we need to solve our dependence on energy imports, then nuclear
power is one of possible scenarios which we would seriously
consider," he said.
($1 = 2.6473 Lithuanian litas)
($1 = 0.7568 euros)
(Editing by James Jukwey)