Natural Gas Law (No.VIII – 1973)

This Law establishes relations related to the transmission, distribution, storage, liquefaction, supply, regasification of liquefied natural gas (LNG) and LNG transshipment. This Law establishes rules related to the organization and functioning of the natural gas sector, access to the natural gas market, as well as criteria and procedures for the issuance of natural gas transmission, distribution, storage, LNG regasification and supply licenses and licenses to operate as a market operator. This Law also lays down measures to ensure an adequate level of security of supply in natural gas and to create a single internal market in the European Union. The provisions of this Law shall apply to activities related to natural gas, including LNG, as well as to activities related to biogas, gas produced from biomass or other types of gas, provided that such gas can be technically and safely fed into the natural gas system and to transport. The provisions of this Law relating to the costs of connection of installations shall not apply to biogas installations. Payments for the connection of biogas production facilities shall be made in accordance with the procedure established by the Law on Renewable Energy of the Republic of Lithuania. This Law establishes the general principles of the natural gas sector and the operations of natural gas undertakings and relations with the customers (in the supply, distribution, transmission and storage of natural gas). The Law consists of nine Chapters divided into 23 articles dealing with the following matters: purpose and terms (Chapt. 1, arts. 1 and 2); organizational issues (Chapt. 2, arts. 3 – 8); transmission, distribution and storage (Chapt. 3, art. 9); accounting and management (Chapt. 4, arts. 10 and 11); gas market (Chapt. 5, arts. 12 – 14); construction and system operation (Chapt. 6, arts. 15 – 18); access to information (Chapt. 9, art. 19); dispute settlement and liability (Chapt. 10, arts. 20 and 21); final provisions (Chapt. 11, art. 23). The following operations in the natural gas sector must be licensed: (a) transmission; (b) distribution; (c) storage; (d) supply. Natural gas supply must be carried out in conformity with the gas contract that must include the following data: (a) gas amount, quality, price; (b) procedure of supply and account settling; (c) rights and obligations of the parties; (d) liability, contract and interruption terms and procedure of dispute examination. Penalties may be inflicted for: (a) unlicensed activities or failure to adhere to the requirements of the license; (b) violation of the set procedure in applying estimated tariffs and taxes to users; (c) failure to adhere to the requirements of transparency of activity set by the laws and other legal acts; (d) unfounded refusal in providing the services of natural gas transportation. The State Energy Regulatory Council determines the procedure for the use of natural gas market financial instruments and currency-linked options, futures and swaps and other currency-linked derivative financial instruments, as well as emission permits or other derivative financial instruments linked to emission permits for natural gas companies in carrying out regulated activities and conditions. According to the procedure established by the Council, natural gas companies have the right to use the financial instruments specified in this point, which are included in the regulated prices. The Council assesses the costs and benefits of applying these financial instruments by setting regulated prices.