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Shale gas could curb Gazprom prices: Commissioner

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Shale gas could curb Gazprom prices: Commissioner

Günther Oettinger - Photo EC

(VILNIUS) - The development of shale gas in Europe could help the continent obtain better deals from its current key supplier, the Russian giant Gazprom, EU 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 United States has encouraged exploration in several EU states including Britain, 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 percent 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 metres (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 neighbouring 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 (LNG) terminal which is expected to start operations by the end of 2014, and is considering a gas pipeline to neighbouring 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 neighbours 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.

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