RIGA - Latvia could play a role in helping build the North European Gas Pipeline, the $5 billion Russian-German project, if the sides can solve the issue of expanding the underground storage facility in Incukalns, Russian Ambassador to Latvia Viktor Kalyuzhny said last week.
Speaking to Parliament's foreign committee members on Feb. 1, Kalyuzhny said if a solution to expanding Incukalns, the only such natural gas storage facility in the Baltics, is agreed upon, Latvia could join the Russian-German construction project.
In this case, building a branch from the natural gas pipeline to Latvia was a realistic possibility, he said.
The ambassador admitted that under normal circumstances the Russian-German gas pipeline would have been built aboveground and not at the bottom of the Baltic Sea. A land-based pipe would be easier to build and maintain, he said.
"Regretfully, everybody thought that this should be handled not directly, but through middlemen. And what happened, happened," said Kalyuzhny. He said that "both sides are to blame" for not finding a common language during the political dialogue.
Kalyuzhny's gambit comes during a thaw in Latvian-Russian relations, which deteriorated in the run-up to the September 2004 educational reform in Latvia. Though Russian TV still contains tendentious reports about the Baltic state, the tone of official statements on the highest level is more conciliatory.
Russian gas giant Gazprom and German companies E.ON and BASF signed an agreement last September on building the pipeline from Russia to Germany, via the Gulf of Finland and the Baltic Sea, bypassing the Baltic states and Poland. The agreement drew sharp criticism from Baltic and Polish politicians and has been used as an example of poor cooperation in Europe's energy sector.
Construction on the overland stretch of pipeline has already begun. The first stage is set for completion in July 2010. The pipeline should have an annual capacity of 27.5 billion cubic meters of gas. By 2012, that amount should increase to 55 billion cubic meters.
Kalyuzhny also announced Russia's intention in helping solve Latvia's electric power issues. Latvia has recently been discussing new power stations, he said, and Russia was ready to join the projects.
"It is an important issue for Russia as well," Kalyuzhny told the Baltic News Service, adding that Russia was ready to consider various conditions for bilateral cooperation.
Energy issues have become a priority in Latvia. The Economy Ministry has prepared a new draft energy program for the next 10 years, envisaging a new coal power plant. The Baltic states are also discussing a new nuclear power station, to provide necessary electric power in the future.
Latvia is currently producing electric power in three hydro power stations on the Daugava River and two thermal power plants. Still, about 30 percent of the nation's energy is imported.