The European Commission has approved compensation granted by Lithuania to Litgas UAB for supplying a mandatory quantity of liquefied natural gas to the LNG terminal in Klaipėda.
The Commission had previously approved a Lithuanian measure in October 2018 covering compensation linked to the terminal’s operation between 2016 and 2024, the EU executive informed in a statement on Tuesday.
That earlier decision was partially annulled by the EU’s General Court in September 2021, which found the Commission should have opened an in-depth investigation into whether compensation for all “boil-off” and “balancing” costs incurred by Litgas between 2016 and 2018 was compatible with EU State aid rules.
Boil-off costs relate to natural losses of LNG while it is stored in tanks before being fed into the gas system, while balancing costs arise when supply and demand do not match, including under swap contracts.
In response to the ruling, the Commission opened an in-depth investigation in December 2022 to re-examine the 2016–2018 compensation under EU State aid rules, including the 2012 Service of General Economic Interest framework, which governs how governments can fund services considered necessary for the public.
In-depth review found scheme complied with state aid rules
The investigation found the compensation complied with EU State aid rules and that Lithuania’s method for calculating the payment for that period was appropriate and correctly applied, the Commission said.
It also concluded that all boil-off and balancing costs incurred by Litgas between 2016 and 2018 could be compensated.
A non-confidential version of the ruling will be published in the Commission’s State aid register under case number SA.44678 once confidentiality issues have been resolved.
