After Poland, Lithuania Becomes U.S. LNG Buyer

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By Tsvetana Paraskova, Oilprice.com

Seeking to diversify its gas imports away from Russia’s giant Gazprom, Lithuania’s state-held gas trader Lietuvos Duju Tiekimas said on Monday that it had signed a deal with Cheniere Marketing International to buy LNG directly from the U.S., adding to the growing list of customers of America’s LNG cargoes.

The Lithuanian company expects to receive the first LNG cargo delivery in the second half of August.

It will be the first time Lithuania imports gas from the U.S. We opted for delivery from Cheniere after evaluating several offers for LNG,” a spokesman for Lietuvos Duju Tiekimas told Reuters.

Since Cheniere sent America’s first LNG cargo abroad in early 2016, U.S. gas exports have reached buyers in Latin America, Europe, Asia, and even the Middle East. Since February 2016, U.S. LNG cargoes have been delivered to 20 countries, including to China, Japan, South Korea, and India. Middle Eastern buyers were Egypt, Jordan, Kuwait, and the UAE. Earlier this month, cargoes from Sabine Pass called at Rotterdam for its first Northwest Europe destination, and to Poland—a first delivery to a country in Central and Eastern Europe, where Russia’s Gazprom reigns supreme.

According to the EIA, the U.S. is expected to become a net exporter of natural gas on an average annual basis by 2018, thanks to declining pipeline imports, growing pipeline exports, and increasing LNG exports. The growth of natural gas exports, especially from new LNG terminals, would lead to growth in U.S. natural gas production through 2020 at about the same rate, 3.6 percent annual average, as it has grown since 2005, the EIA reckons.

Lithuania, for its part, is trying to reduce reliance on Gazprom, breaking its monopoly in 2014 by opening an LNG terminal at the Klaipeda port as part of its efforts to increase energy security and competition.

Last month, Lithuania urged the European Commission to impose stronger obligations and conditions on Gazprom in its antitrust settlement with the Russian giant.

If the European Commission does not take our proposed stronger obligations into account, we see no other way to proceed than for European Commission to issue Gazprom with a fine,” Lithuanian Energy Minister Zygimantas Vaiciunas told Reuters in a statement via email.

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