VILNIUS - Lithuanian officials have expressed interest in helping build a liquid natural gas terminal in Poland as a means of diversifying its energy supplies, Lithuanian media reported this week. According to the Verslo Zinios daily, government officials are keen to continue strengthening the Baltic state's energy independence from Russia, but while attractive, an LNG terminal in Poland could prove costly.
"The question is whether it is worthwhile for Lithuania and the other Baltic states to participate [in this project]," Saulius Specius, an advisor to Prime Minister Gediminas Kirkilas, told an energy conference in Vilnius on Feb. 9.
"Under current conditions, we have no technical capabilities for importing gas from this terminal," he added.
Liquid natural gas is one of the buzzwords in European energy markets, and currently there is a scramble to build more infrastructure in order to handle demand. There are so many orders for new LNG terminals that the average three-year construction period has been extended to four.
For Lithuania to benefit from an LNG terminal in Poland, an 820-kilometer pipeline would have to be built from Poland's Niechorze to Janiunai in Lithuania. This, Lithuanian officials say, would cost some 830 million euros 's or about one-third of what it would cost to build a new, single-reactor nuclear power plant.
Poland, no less concerned about energy security than the Baltic states, plans to go ahead with construction of the terminal, which will cost some 350 million euros. The terminal, which should be built by 2011, will be able to import 3 's 5 billion cubic meters of liquefied natural gas.
Deividas Matulionis, director of the Foreign Ministry's economic security department, stressed that Lithuania needed to insure its gas industry from dependence on Russia.
"Without this connection, we would not be able to receive gas from the Polish pipeline system in case of a crisis," he said. "Only this connection can give the Baltic states access to the alternative gas flows that will reach Poland in the not too distant future."
Specius said that if Poland built a pipeline system that could also handle imports of Norwegian gas then the project would become yet more attractive for Lithuania. As it is now, the Baltic state uses some 3 billion cubic meters of natural gas per year, all of which is supplied by Russia.
Currently there are 11 LNG terminals in Europe, but six more are being built, and there are plans for two dozen more. Germany, for instance, has plans to build a terminal at Wilhelmshaven.
Liquid natural gas, while expensive to produce and ship from terminal to terminal, allows many communities far removed from pipeline networks 's such as coastal towns 's to diversify their energy supply. Deregulation of the gas industry in Brussels is making LNG terminals more attractive.
Meanwhile, analysts at an energy conference held in Warsaw on Feb. 12 said that Europe 's especially Poland 's had little alternative to Russian gas. "Yes, you can nibble away at the edges with alternative sources for energy, but the bottom line is Europe is going to get a big chunk of gas from Russia," Chris Skrebowski, an analyst at the London-based Energy Institute, was quoted by Interfax as saying.
"The only significant alternative [for natural gas] is Norway, and there is a bit more to be gotten out of Algeria," Skrebowski said.
