Achema trying to cancel mark-ups for LNG terminal financing through court
VILNIUS. Feb 7 (Interfax) - Lithuanian fertilizer producer Achema, which is part of Achemos grupe, has asked a court to cancel a decision by the Lithuanian National Control Commission for Prices and Energy establishing a mark-up to finance the construction of a liquefied natural gas (LNG) terminal in the country.
Klaipedos nafta, which is implementing the LNG terminal project, said that it had been notified by the Vilnius Regional Administrative Court of Achema's appeal.
Achema is asking the court to annul a decision dated October 19, which provides for partial compensation for the LNG terminal's construction worth 113.798 million litai via a gas transmission tariff in 2013. In addition, the company is seeking the cancellation of an October 26 order that established a mark-up for the terminal for this year at 37.53 litai per 1,000 cubic meters (excluding VAT).
Starting at the beginning of this year, all consumers have to pay this mark-up. Lietuvos dujos is administering the funds, and after they are collected they will be handed over to Klaipedos nafta. Since the beginning of 2013, each Lithuanian gas consumer has been financing the terminal's construction at 4 cents per cubic meter.
Achema brought the mark-up issue to the European Commission last year. In particular, it, Lietuvos dujos and two Lithuanian associations appealed the legally enshrined terminal mark-up and the so-called "25% rule," according to which the largest gas importers will be required to buy 25% of the gas consumed through the future terminal. According to Achema, it will pay around 80 million litai on the mark-up alone over the course of two years.
This year, the Constitutional Court of Lithuania will have to consider whether or not financing a portion of construction costs through gas transmission tariffs contradicts the country's basic laws.
Meanwhile, on Thursday Lithuanian Prime Minister Algirdas Butkevicius told reporters that the government intends to change the current financing model for the LNG terminal by scrapping the terminal mark-up.
"We will hope that certain changes might occur starting in July. Right now we can't make any sudden changes, since certain loans are scheduled from commercial banks, and these dues [mark-ups] are envisaged as financial collateral. But we will hope that the bank will offer its final vision on whether we could use other funds or scrap this payment as a financial guarantor," Butkevicius said.
Klaipedos nafta is currently in talks with banks about a 73-million-euro loan and $50 million worth of guarantees.
Around 453 million litai of investments will be needed to implement the terminal project in 2013-2014. Two hundred million litai will be financed through the terminal mark-up, and the other 253 million will come from long-term commercial bank loans. If the mark-ups are abandoned, Klaipedos nafta will have to borrow 200 million litai.
The litas is pegged to the euro at 3.4528 litai/euro.