VILNIUS - The Russian-Ukrainian row over natural gas prices and continual delays in launching an electricity bridge with Poland have created an atmosphere of alarm among Lithuania's leadership, who have pushed the issue of building a new nuclear power plant to the top of their agenda.
Politicians also hinted that, in the absence of a new plant project, they would like to postpone the closure of Ignalina Nuclear Power Plant.
Economy Minister Kestutis Dauksys said Jan. 9 that Lithuania should decide on a new atomic plant without delay, saying that the project would require some 350 million euros from the state.
"This year we must have a clear decision if and what we will build and decide who could invest in it and begin negotiations," Dauksys told a press conference.
In his opinion, the government should have at least a 30 percent stake in the new plant, which would cost around 3 billion euros, and that it would have to provide for one-third of outlays initially. International energy companies, including Estonia and Latvia's, could also take part in the project.
"We look at this power plant not only as a commercial project but also as an entity that would ensure Lithuania's energy security," the minister said. "If it is solely a commercial venture, who can guarantee that Gazprom or someone else will not buy all the shares in two or three years? It is very important."
Gazprom is Russia's state-run monopoly gas producer that was in the center of the confrontation with Ukrainian authorities.
Dauksys said Lithuania was already dependent on Russia for its gas supplies and the planned closure of the INPP, which should take place in 2009, will only further increase its dependence. He said that Lithuania should sit down with EU leadership and discuss the possibility of extending the life of the INPP's second reactor until a new one is built.
He acknowledged that negotiations would be difficult and that chances for agreement would be slim.
Speaking on Jan. 6, Prime Minister Algirdas Brazauskas said that Lithuania could talk with Brussels about extending Ignalina's operating life.
"New proposals are emerging in the energy sector, in particular as far as the extension of operations with the Ignalina nuclear plant is concerned. The arguments, which we used in talks over the shutdown of the plant five years ago, have grown outdated since that time," Brazauskas said after a meeting on energy issues.
During negotiations over the closure of INPP five years ago, the majority of issues comprised technical matters, he said. Now, however, Lithuania could set out more obvious reasons to back the extension.
What's more, Polish authorities' tepid response to the idea of a power bridge between the two countries has many Lithuanians worried.
"This is our connection with Europe via Poland 's the bridge project has stalled, and we will seek to hold negotiations with new Polish authorities. However, we are already late if we link the timing of the bridge project with the closure of the second unit."
However, EU Energy Commissioner Andris Piebalgs, a Latvian, has said on more than one occasion that Lithuania must stick to its commitments on closing INPP. He did, however, leave open the possibility of building a new nuclear power plant in Ignalina, with the caveat that state involvement be minimal.
The Ignalina International Decommissioning Support Fund, which is being administered by the European Bank for Reconstruction and Development (EBRD), has approximately 340 million euros, including accrued interest. The European Commission has pledged to provide another 88 million euros to the fund.
Meanwhile, Lithuanian experts have also begun to claim that the country needs an underground natural gas storage facility to avoid problems should supplies from Russia be disrupted. Raimundas Paliukas, president of the Lithuanian Gas Association, said that the country needed the capacity to store enough fuel to last for at least 90 days.
The European Parliament has included a gas storage project on the list of Europe's priority projects.
A year ago, Germany's ESK conducted a feasibility study for the construction of an underground gas storage in the district of Telsiai, in western Lithuania. But additional geological research 's at a cost of 12 million litas (3.5 million euros) 's is required to determine if the facility can be built.
Brazauskas has said that such a facility could be built on the Latvian territory since Lithuania has no sites suitable for this purpose. Latvia already possesses one gas storage site.
