The pipeline expansion is part of a Russian government action plan aimed at increasing supplies to Kaliningrad— a Russian enclave between Lithuania and Poland.
Besides the pipeline, the plan also calls for the upgrading of gas metering stations and for construction of a compressor station near Vilnius and an underground gas storage facility at Kaliningrad.
Viktoras Valentukevicius, head of Lithuania's gas company Lietuvos Dujos, 38.9% owned by Gazprom, said the pipeline was essential for his country.
“ Natural gas will become a key energy resource for our country for decades. This line is very important for Lithuania as a guarantee of stable energy supplies from Russia,” said Valentukevicius.
In December, Lithuania will close its Soviet-era reactor in Ignalina, which will transform country a net energy exporter to an energy importer.
Since Lithuania has no direct link to Europe’ s electric power grid, it has no choice but to import more energy from Russia— a matter that leaves many Lithuanians apprehensive, especially given Russia’ s recent decision to cut off supplies to other countries in the region.
In September, Lithuania and the US agreed that the US Trade and Development Agency (USTDA) would provide an $800,000 grant to conduct a feasibility study for an LNG import terminal in Lithuania.
The study will determine the possibility of building a terminal with a capacity of 1.5–2 billion cu m of LNG and will evaluate three potential sites, including one offshore.
According to current plans, the terminal will be 80% state owned, with the remaining 20% to be held by AB Achema, a private producer of nitrogen fertilizers and chemical products.
According to a statement by a Lithuanian economy ministry official, construction of the terminal could start 3–4 years after the completion of the feasibility study, which is expected in 2010.
Lithuania’ s Energy Minister Arvydas Sekmokas recently said his country is looking for a strategic investor in the terminal from a foreign country “ rich in natural gas.”