October 14, 2015 / 5:46 PM / 4 years ago

REFILE-UPDATE 1-Lithuania in talks with Cheniere Energy over LNG imports

(Adds minister’s first name in paragraph 4)

By Jonathan Saul

LONDON, Oct 14 (Reuters) - Lithuania is in talks with U.S. liquefied natural gas company Cheniere Energy Inc over potential imports as it seeks to cut dependence on Russian state-owned supplier Gazprom, its energy minister said on Wednesday.

Lithuania opened an LNG import terminal in 2014 and started exporting natural gas to neighbouring Estonia earlier this year, breaking the supply monopoly of Gazprom.

At the same time the Baltic country is seeking to tap a wider pool of suppliers itself. U.S. LNG companies will be able to start exporting at the end of this year.

“We have good relations with Cheniere ... our negotiations are about first shipments (next year),” Rokas Masiulis told Reuters on a visit to London.

“We would love to have U.S. cargo in our region to have competition with Gazprom. But of course negotiations will depend on price terms.”

Pro-Western Lithuania, which gained independence from the former Soviet Union in 1991, has been a vocal critic of Moscow’s annexation of Crimea and the conflict in Ukraine.

Lithuania’s existing gas supply contract with Gazprom is due to expire at the end of the year.

“I believe negotiations with Gazprom now will be on competitive, reasonable terms and that will be just business and nothing else,” Masiulis said.

“After we have built an LNG terminal, there is no possibility of blackmail. Since we think there is no possibility of blackmail, discussion will be rational and economical rather than political. This is a big step.”

CRUDE OIL IMPORTS

Lithuania imports most of its crude oil from Russia via tankers for its 10 million tonnes per year - or 200,000 barrels per day - refinery, which is owned by Poland’s largest refiner PKN Orlen.

In 2006, Russia cut oil supplies by pipeline to the Lithuanian refiner after the Baltic state agreed to sell it to Polish, not Russian buyers.

The head of Russia’s biggest oil company Rosneft said on Tuesday Saudi Arabia had started supplying crude oil to neighbouring Poland, a market traditionally dominated by Russia, which Russian energy minister Alexander Novak described as the “toughest competition”.

Masiulis said it was up to Lithuania’s private refinery on whether they would import Saudi crude.

“Technically if Poland can import we should be able to import as well. We would welcome more alternative energy sources to the market. The more the better,” he said.

Masiulis said Lithuania would also be open to purchases of U.S. crude oil if the United States repeals an export ban.

“We are at this moment looking at the United States - crude,” he said.

A bill to repeal the U.S. oil export ban passed the House of Representatives on Friday, but faces an uncertain future after a veto threat by President Barack Obama. (Additional reporting by Nerijus Adomaitis in Oslo and Oleg Vukmanovic in Milan, editing by William Hardy and David Evans)

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