Gaz-System & Lietuvos Dujos to Cooperate on Polish-Lithuania Interconnection
Gaz-System and Lietuvos Dujos will move ahead with cooperation on interconnection of supply between the two companies, following the signing of a feasibility study contract yesterday.
Polish gas transmission operator Gaz-System yesterday announced that, together with Lithuanian natural gas company Lietuvos Dujos, it had signed a contract with winning bidder ILF Consulting Engineers to undertake the study.
The study will seek to strengthen the interconnection of supply between Poland and Lithuania and will be the basis for the further actions on the project. The planned pipeline resulting from the cooperation is expected to be 562 kilometres in length. If constructed, it would be able to supply Lithuanian and other Baltic countries with 2.3 billion cubic metres of gas annually, possibly increasing in time to 4.5 billion cubic metres a year.
"We are convinced that this project is of a great importance for the energy security and market integration of the Baltic States," Deputy General Manager Lietuvos Dujos, Joachim Hockertz said yesterday. "In comparison with other diversification projects in the region, the interconnection between Poland in Lithuania provides a broader range of benefits, enabling access both to EU gas and global LNG markets and through bi-directional flow capabilities a higher security of supply for the connected countries."
Gaz-System says the agreement and feasibility study are an important step forward for the Baltic states, helping to bring to an end those countries' isolation from the European Energy market.
"The advantages of the construction of the GIPL (Polish-Lithuania interconnection) are above all greater security and diversification of gas supplies in the Baltic State region," President of the Board of Gaz-System, Jan Chadam said.
"We are also considering this investment in the context of including Lithuania in the North-South Gas Corridor. These values may be very precious for the market and consumers of the Baltic States. Gaz-System expects that a significant part of the investment will be financed from EU funds because this is a priority project in the scope of eliminating energy islands in Europe."
Gaz-System expects to see a high level of European investment into the project in addition to the financing currently granted by the European Commission. Currently, the European Commission is covering 50 per cent of the costs of the feasibility study preparation-related expenses. Gaz-System and Lietuvos Dujos are splitting the remaining 50 per cent share.