VILNIUS - A Lithuanian energy official has said that Gazprom was mulling over building a new gas-fired power plant in Kaunas in order to take advantage of the electricity dearth that will ensue after the Ignalina nuclear plant is shut down at the end of 2009.
Antanas Pranculis, CEO of Kauno Termofikacijos Elektrine (Kaunas Heat and Power Plant), met with Gazprom officials in Moscow last week and said the company wanted to exploit the post-2009 megawatt-deficit in Lithuania and the Baltics.
"The niche that will emerge in the energy supply market after the closure of INPP [Ignalina Nuclear Power Plant] should be filled," he told the Lietuvos Zinios daily.
He said KTE had submitted the proposal to build a new plant in Kaunas, which would be built on KTE's territory near the Kaunas-Klaipeda highway.
Pranculis said that power plants of the type under discussion require some 30 - 32 months to build once the ink has dried on the agreement. The cost can run up to 850 million litas (246 million euros).
Gazprom's interest in the project is likely to be directly related to how quickly the Baltic states and Poland can agree on a new nuclear power plant. The company will want to gauge how much electricity there will be on the market if both a new gas-fired plant and a nuclear plant are selling kilowatts. Also, new export routes to Poland and Sweden will play an important role in making any decision.
Lithuania is currently upgrading the Lithuanian Power Plant, located 50 kilometers west of Vilnius, in order to make up for the electricity shortfall after 2009.
LPP, which has a capacity of 1,800 megawatts, will become the main source of power production in the Baltic state after Ignalina is shut down, and therefore is considered a strategic asset for the Lithuanian government. In fact, the plant will account for 70 percent of Lithuania's power supply post-Ignalina.
The upgrade of LPP, which will cost some 252 million euros, is being carried out to meet EU environmental standards and to allow for liberalization of energy distribution, a key aspect of the EU energy market.
LPP was built between 1960 - 1972 and consists of eight power-generating units.