EU Commissioner: Shale Gas Could Curb Gazprom Prices

VILNIUS, Lithuania - The development of shale gas in Europe could help the continent obtain better deals from its current key supplier, the Russian giant Gazprom, E.U. Energy Commissioner Guenther Oettinger said on Friday.

"I am sure (that) to have some shale gas option is a good instrument for our long-term negotiations (with) Gazprom and Russia," Oettinger told journalists in the Lithuanian capital Vilnius.

Success with shale gas in the U.S. has encouraged exploration in several E.U. states including the U.K., Poland and Hungary. Lithuania is also considering an exploration deal with Chevron.

Oettinger insisted that Gazprom, currently Lithuania's sole natural gas supplier, was charging the Baltic nation, a Soviet republic until 1990, up to 40% more than the market price in Germany.

"It is not acceptable," Oettinger said. "At the end of the story, we need a common price from Lisbon to Vilnius, from London to Athens," he added.

While Lithuania imported 3.3 billion cubic meters (117 billion cubic feet) of natural gas from Russia last year, officials in Vilnius insist they could be sitting on more than 10 times that amount of extractable shale gas reserves.

Lithuanian lawmakers are considering new laws which would strengthen environmental regulations after protests erupted over hydraulic fracturing, or "fracking," a controversial technology used to extract gas from shale.

Critics deem it a threat to both the environment and to human health.

Global energy giants ExxonMobil and Marathon oil dropped shale gas exploration in neighboring Poland after finding that its deposits were too deep to extract using conventional fracking.

Lithuania is also trying to break Gazprom's politically-charged monopoly--a legacy of Soviet-rule--by constructing a liquefied natural gas terminal which is expected to start operations by the end of 2014, and is considering a gas pipeline to neighboring Poland.

Oettinger also said he expected Lithuania to take a final decision on a new nuclear power plant by the end of the year, following talks with Baltic neighbors Latvia and Estonia.

In October, Lithuanian voters rejected the nuclear plan in a non-binding referendum. Last month the government said they would resume talks, but would seek better terms.

Copyright (c) 2012 Dow Jones & Company, Inc.


Click on the button below to add a comment.
Post a Comment
Generated by readers, the comments included herein do not reflect the views and opinions of Rigzone. All comments are subject to editorial review. Off-topic, inappropriate or insulting comments will be removed.

Related Companies

Our Privacy Pledge

Most Popular Articles

From the Career Center
Jobs that may interest you
Project Manager
Expertise: Engineering Manager|Project Engineer
Location: Orlando, FL
Project Manager
Expertise: Engineering Manager|Project Engineer
Location: Chicago, IL
Accounting Manager
Expertise: Accounting
Location: Houston, TX
search for more jobs

Brent Crude Oil : $51.78/BBL 0.77%
Light Crude Oil : $50.85/BBL 0.83%
Natural Gas : $2.99/MMBtu 4.77%
Updated in last 24 hours