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Klaipėda Liquid Gas Terminal begins operation

2015 01 01. Today Klaipėda Liquid Gas Terminal officially begins pumping gas into the Lithuanian gas network.

The Liquid Gas Terminal, officially completed in December 2014, is one of the largest infrastructure developments of independent Lithuania. It has been designed to provide Lithuania an ability to import gas from other sources than Russia. Before this year, Lithuania was completely dependent on Russia for its gas imports as all the Lithuanian gas import pipes came from the east.

While the costs of the Liquid Gas Terminal (which were paid by Lithuanian taxpayers alone as the European Union did not support it) caused some discussions when the project was initially announced 4 years ago, most doubts dissipated as Russia's policies against its neighbors (e.g. Ukraine) became more aggressive in late 2013. This made the Liquid Gas Terminal one of the few Lithuanian governmental projects that did not suffer severe delays, controversies or cost overruns related to political battles (unlike, for example, the Visaginas Nuclear Power Plant project).

Klaipėda Liquid Gas Terminal consists of relatively minor immovable infrastructure and a large perpetually moored ship named "Independence". The usual operation of the Terminal includes pumping gas from the arriving gas tankers into "Independence" and then into the gas network.

Klaipėda Liquid Gas Terminal under construction in summer, 2014. Before the ship 'Independence' arrived the terminal was little visible. ©Augustinas Žemaitis.

The Terminal was expected to cost ~55 000 000 EUR annually to operate until 2025, decreasing to ~38 000 000 EUR in period 2026-2039 as the ship and credit will be paid off. This should make 1%-3% of the total gas price in Lithuania. However, the Terminal is expected to ensure better gas prices either directly (if Lithuania would import gas from non-Russian sources) or indirectly (as Russia is forced to decrease the previous above-market rates facing new competition).

Moreover, the Terminal makes Lithuania no longer susceptible to a possible gas embargo by Russia. Together with Būtingė Oil Terminal (completed in 1999) and future high tension power lines to Poland and Sweden, Klaipėda Liquid Gas Terminal forms part of the "Energetic independence (from Russia)" goal (also known as "Energetic security"), widely adopted across the Lithuanian political spectrum.

The Terminal is owned by a company "Klaipėdos Nafta" which is 72,32% owned by the Lithuanian government.

Article written by Augustinas Žemaitis

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