VILNIUS (Reuters) - Gazprom (GAZP.MM) will sell its stakes in two Lithuanian gas distribution companies, the Baltic state said on Thursday, a day after the Russian company was slapped with a record fine for breaking competition rules in the country.
The disposal ends a stand-of lasting several years between Lithuania and Russia over the implementation of EU rules which aim to separate gas supply from the ownership of distribution networks - rules which have been strongly criticized by the Kremlin.
Lithuania’s competition authority had on Wednesday imposed a record 123 million litas (28.6 million pounds) fine on Gazprom, saying it had prevented alternative suppliers from entering the market.
Lithuanian Prime Minister Algirdas Butkevicius said in an emailed statement Gazprom had taken up the government’s offer and decided to sell its 37.1 percent stakes in Amber Grid (AMG1L.VL) and Lietuvos Dujos LDJ1L.VL.
The two gas companies were sold to two state-owned entities for a combined 140.8 million euros ($191.7 million).
Lietuvos Dujos sells gas to households and businesses and has a market share of 40 percent, while Amber Grid operates a gas transmission network.
Gazprom was not immediately available to comment.
Gazprom is supplier of a quarter of Europe’s gas needs and also faces an EU probe for suspected anti-competitive behaviour
in some eastern European markets, including overcharging customers and blocking rival suppliers.
The Russian company said earlier this year it was keen to settle the antitrust investigation but would not be pushed into changing its pricing practices in eastern Europe by regulatory pressure.
The Lithuanian government said taking control of the country’s gas system would allow it to implement the EU rules that require the separation of supply and transmission assets.
The two state-owned firms had in May bought 38.9 percent stakes in Lietuvos Dujos and Amber Grid from Germany’s E.ON (EONGn.DE) for a combined 113.2 million euros.
The government said it was open to the possibility of selling some of its holdings shares to outside investors, but had no immediate plans to do so.
While Lithuania plans to start importing liquefied natural gas (LNG) in 2015, Gazprom is expected to remain a key gas supplier and the asset sale should not affect agreed gas prices until the end of 2015, officials said. [ID:nL6N0NU46E] Lithuania plans to import 0.54 billion cubic metres (bcm) of gas via the LNG terminal in Klaipeda port per year. The country’s total gas consumption averages about 3 bcm.
Gazprom’s exit from Lithuania could mark a turning point in the Baltic state’s relations with Russia, an important trade partner, former energy minister Arvydas Sekmokas said.
“Putin went as far as to call Lithuania a robber who wants to take away property from Gazprom,” Sekmokas said, referring to the Russian president. “After Gazprom sells the stakes ... there will no longer be any basis to speak of wrong actions against Gazprom.”
Writing by Nerijus Adomaitis; Editing by David Holmes