A dispute regarding the financing scheme of a Liquefied Natural Gas Terminal

Our team represented the operator of Lithuania’s natural gas transmission system which is in charge of the transmission of natural gas to system users against a system user who is a leading manufacturer of nitrogen fertilizers and chemical products in the Baltic States in a dispute regarding the financing scheme of a Liquefied Natural Gas (LNG) Terminal.

The dispute pertains to priority importance to Lithuania. LNG Terminal is one of the most important of Lithuania’s energy projects aimed at improving the energy security situation and creating conditions for a natural gas market. The LNG Terminal has been scheduled to go into operation and commence the supply of gas to Lithuania by the end of 2014.

The team argued that the users of the natural gas transmission system are bound to the legal regulation that imposes a duty to finance the LNG Terminal. The respondent submitted that the legal regulation fails to comply with European Union law violates the right to property and puts an undue burden on the system users to finance the construction of the LNG Terminal.

Kaunas District Court acknowledged the position of our client as grounded and obliged the system user to pay approximately 40 million Lt.