Lithuania gets serious about LNG terminal

  • 2008-03-26
  • From wire reports

FIRST MOOR: All the Baltic states have expressed interest in building an LNG terminal, but Lithuania may be the most determined to have the first.

VILNIUS - Lithuania could build a 500 million euro liquefied natural gas terminal between 2010 and 2013, an official has said.
Anicetas Ignotas, the Economy Ministry's undersecretary, has told a parliamentary committee that an LNG terminal with an annual capacity of 2 billion cubic meters would cover an area of three to nine hectares.
He said that a final government decision on planning the terminal could be made this summer.
Support for an LNG terminal has gathered support in Lithuania given the imminent closure of the second nuclear reactor in Ignalina and the country's eagerness to diversify gas supplies.

Social Democratic MP Birute Vesaite, chairwoman of Parliament's Economics Committee, told the Baltic News Service that the country would need an LNG facility sooner than in four or five years' time.
"We should have something in place as early as 2010 if the Ignalina Nuclear Power Plant is closed," she said.
Lithuania currently pays Latvia to store natural gas at a storage facility in the neighboring country. However, it is estimated that annual gas consumption will reach some 5.5 billion cubic meters once Ignalina shuts down, which calls for additional infrastructure.

The Baltic states have no LNG terminal, which have become increasingly popular in Europe as more regions removed from the gas pipeline system search for cheaper energy alternatives.
What's more, with natural gas prices rising rapidly, consumers are looking to diversify supplies and boost storage capabilities. The LNG market, as a result, is increasing nearly 7 percent per year.
Prime Minister Gediminas Kirkilas said last month he believed that the government would make a decision on the LNG terminal project within several months and that construction could begin by the end of 2008.
He said that possible locations for the project included a site close to the Butinge crude oil terminal or a planned deep-water port in Klaipeda.

Endesa, a leading Spanish electricity and gas company, has been mentioned as a potential partner in the project.
Meanwhile, the Achemos Grupe (Achema Group), one of Lithuania's largest business conglomerates, has said that it intends to take part in the project. The group's fertilizer plant Achema consumes about 1.5 billion cubic meters of gas annually, or more than half of the country's annual consumption.
Achema would be willing to cover about 200,000-300,000 litas (57,971-86,956 euros) of the study costs, Rimas Varkulevicius, president of the Achema Group and deputy president of the Lithuanian Confederation of Industrialists, told the Verslo Zinios daily.
Overall costs of the study might reach up to 1 million litas. The remaining amount would be allocated from the state budget.

Achema planned to invest in the terminal, yet its investments would hardly exceed half of the total amount required, Varkulevicius said.