VILNIUS – The idea of exporting Lithuania's excess electrical energy to Western markets appears to be another notch closer to reality.
The PowerBridge Group and Lietuvos Energija (the Lithuanian Power Company) recently announced they have met the requirements of an international tender and have signed an agreement regarding the construction of an electrical power line between Lithuania and Poland.
Such a line would be the first link between the Soviet-styled power grid system and the one used throughout Western Europe.
The PowerBridge Group, a consortium including the American companies of CalEnergy, Siguler Guff and Company and The Stanton Group, entered negotiations with Lietuvos Energija in May after winning a tender for the power line project over Enron Europe.
The two sides had a two-month period to reach an agreement, or else Lietuvos Energija would have begun negotiations with Enron.
When CalEnergy's vice-president, Adrian M. Foley, and Lietuvos Energija's general director, Anzelmas Bacauskas, both signed the agreement, Enron's possibilities of taking on the project disappeared.
The PowerBridge Group also agreed to purchase 6 billion kilowatt hours of power each year at $0.025 per kilowatt. Linas Kojelis, whose company Kojelis and Co. is representing the PowerBridge group in Lithuania, earlier estimated that the consortium plans to invest around $450 million in the building, financing and operation of the power line and converter station.
PowerBridge officials have stated the line could be up and running by the end of 2001, if not sooner. Kojelis seemed pleased by the negotiations and stated that the next steps of the project are now being undertaken.
"A framework for the discussion of a technical agreement between the Lithuanians and PowerBridge has now been built," said Kojelis. "There is no final agreement until we have a technical agreement. It is necessary to evaluate the type of terrain (where construction will occur) and the technical cost.
The Lithuanians are currently putting together a technical team to map the terrain."
While continuing their work with the Lithuanians, PowerBridge is now increasing the amount of attention they are paying to Poland.
While most of the proposed electric power line is to be built in Lithuania, a part of it will also be constructed in their neighbor to the west.
"In order for the project to be a success, we need an agreement with the Poles and the Lithuanians," said Kojelis. "Since most of the project will take place in Lithuania, the Lithuanians had to decide first. But we feel discussions with the Poles are going well. They are now facing the same sort of decisions that the Lithuanians faced earlier."
Bacauskas was reportedly content with the results of the negotiations and was also looking ahead to the next steps.
"The agreement (with PowerBridge) opens the doors for Lietuvos Energija to negotiate with its Polish counterpart," said Bacauskas.
Because PowerBridge hopes that the new line will serve to export Lithuania's energy into more lucrative markets, this next phase of the project also includes negotiating power sale contracts with Western European customers.
