Baltic States’ Contributions to Gazprom-Alternative Pipeline Redistributed

The European Union’s Agency for the Cooperation of Energy Regulators (ACER) has redistributed the costs among the countries that have nodded to participation in the construction of a Gazprom-alternative gas pipeline, stretching through Poland and Lithuania.

For example, Latvia will now contribute $39.1 million USD, $6.7 million less than initially planned.

The project is slated for commissioning during 2019-2020, and according to ACER’s decision, after the project is completed, Poland will receive $113.8 million USD, of which $73.1 million will have to be paid by Lithuania, $39.1 million by Latvia and $2 million by Estonia.

 “Latvia’s investment into the project has been reduced by almost €5 million ($6.7 million), making the final payment €29.4 million. This amount will be used during the implementation of the project, which will take several years,” Economy Minister Vjaceslavs Dombrovskis, of the ruling Reform Party, said, praising that the idea of an alternative gas pipeline is now finally fledging up.

The Baltics expects that the launch of an alternative gas interconnector will end the Baltic States’ energy isolation, linking them to other Central European and Eastern European gas markets, and in particular with Poland’s liquefied gas terminal.

Meeting recently with Deputy Prime Minister of Poland Janusz Piechocinski, the Latvian PM concurred with him on the significance of the project and the necessity of making decisions aimed at diversifying gas supplies that can ensure the region’s energy security.

“Among other things I also discussed the necessity to have the financial investments of the project’s member states reviewed, trimming the total amount that Poland should have initially received. On August 11, ACER made a decision to reduce the sum that Poland will receive,” Dombrovskis said.

Over the past several months, he is said to have been discussing the progress of the project with European Energy Commissioner Günther Oettinger, Polish Gaz System Company Manager Jan Hadam and the departure of Lithuanian Energy Minister Jaroslav Neverovich.

Meanwhile, in anticipation of the arrival of 'Independence,' a floating storage and regasification unit (FSRU) that is due to dock the Lithuanian seaport of Klaipeda in the fall, the Norwegian ambassador to Vilnius, Leif Ulland, has praised Norway as “being among leading nations in the global energy industry and Lithuania’s strategic partner in the Klaipeda LNG Terminal project.”

“For Norway, oil and gas are commercial areas, and as ambassador my involvement has been to promote our business interests…But at the same time Norway, just as the EU, supports Lithuania and the Baltic countries in their wish to achieve energy independence. It is normal to have competition and be able to choose when you want to buy something,” he told Lithuanian media.

Norway’s Höegh LNG and Statoil have been awarded international tenders to build the Lithuanian LNG terminal and also supply LNG to the Baltic country.

“Both companies are well known in the energy markets and have amassed a wealth of experience in the LNG field…It is not very surprising that they won tough international tenders to build the LNG terminal and supply LNG to Lithuania,” the Norwegian ambassador noted.

He underscored that with the FSRU unit on the way to the Baltic port and Statoil - Lithuanian LITGAS contract expected soon on the LNG deliveries, Norway and Lithuania have reached a new phase in the cooperation.

The Lithuanian Government pursues the goals of energy independence through several major EU-supported power projects, like NordBalt and LitPol - electric power interconnectors that will link Lithuania and Poland with the Western power transmission markets and through the alternative gas pipeline.

The Baltic country also mulls building a nuclear power plant along with Hitachi Ltd, and the decision on the plans is expected to be announced in the fall, too.

“By the end of next year, with the LNG terminal in place and with the opening of the NordBalt cable to Sweden, Lithuania‘s energy dependence will have been greatly reduced,” Norway’s ambassador emphasized. “This will bring energy independence to a new stage. We are already seeing how the LNG capacity has been influencing the price Lithuania pays for gas and the ownership of gas companies in Lithuania.”