VILNIUS, Sept. 21 (Xinhua) -- Lithuania has secured natural gas supplies from the United States for 10 years, covering about 40 percent of the country's household gas demand, Lithuania's Ministry of Energy announced Monday.
Ignitis, the electricity and natural gas supply subsidiary of state-owned energy group Ignitis Group, signed on Monday the agreement with U.S. natural gas producer EQT.
According to a statement released by the Ministry of Energy, under the agreement, Ignitis will purchase 10 liquefied natural gas (LNG) cargoes from EQT between 2027 and 2036, with one cargo, equivalent to about 1 terawatt-hour (TWh) of gas, to be delivered each year.
The agreement marks the first long-term gas supply contract between Ignitis and a U.S. company and introduces U.S. Henry Hub-linked pricing into the pricing mechanism for the first time.
The contract's pricing is linked to two international natural gas price indices, the U.S. Henry Hub and the European TTF.
According to Ignitis, linking gas prices to two different markets will reduce reliance on the European TTF index and help mitigate the impact of sudden price increases in the European market on household gas prices.
"This long-term agreement is an important step toward strengthening the security and flexibility of natural gas supplies for Lithuanian household customers. It will diversify supply sources, enable more effective management of price fluctuation risks and ensure more stable supply conditions over the longer term," Ignitis CEO Andrius Kavaliauskas said.
The country's Energy Minister Lukas Savickas said the agreement would help reduce Lithuania's vulnerability to gas price fluctuations in the European market and mitigate their impact on household bills.
