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    EU Allots Financing for Construction of Gas Interconnection Poland-Lithuania

Summary

GIPL is the first gas pipeline connecting Lithuania and Poland and the first gas interconnector between the Eastern Baltic Sea region and the Continental Europe.

by: Linas Jegelevicius

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Featured Articles, Pipelines, Gas Interconnection Poland–Lithuania (GIPL), News By Country, Lithuania, Baltic Focus

EU Allots Financing for Construction of Gas Interconnection Poland-Lithuania

Under the EU’s Connecting Europe Facility (CEF), €295.4 million has been awarded towards GIPL, the gas pipeline between Lithuania and Poland. The Polish transmission system operator Gas Transmission Operator GAZ-SYSTEM S.A and the Lithuanian transmission system operator AB Amber Grid inked a trilateral agreement with the EU Innovation Network Executive Agency – INEA.

The project is expected to significantly increase Baltic energy security, independence and boost the prospects of the liquefied natural gas terminals in the Lithuanian seaport of Klaipeda and Poland’s Świnoujście.

The signing ceremony in Brussels was attended by European Commission President Jean-Claude Juncker, Lithuanian President Dalia Grybauskaite, Polish Prime Minister Ewa Kopacz, Latvian Prime Minister Laimdota Straujuma and Estonian Prime Minister Taavi Roivas.

Noting that the the investment amount of nearly €300 million is “the largest ever” for the European gas sector, Juncker explained that it will give “dividends” – guaranteeing free energy flow in Europe.

“We have already secured a passport-free movement, capital movement and now we need to do it with energy. In order to diversify the energy sources, we cannot do it alone – it is needed both to our citizens, consumers and industry,” the EC President said.

Lithuanian President Dalia Grybauskaite emphasized the importance of the pipeline for the entire European Union.

“This stride will enable us to create a single (EU) energy union. Eleven years ago, we could just dream of  joining the EU and being connected with it both economically and  energy-wise,” she said, adding, “Now we will have the electricity interconnector with Sweden and we are about to complete the grid link with Poland. And now comes the pipeline...It is very symbolic that we have received today this very big financing from the European budget – until now, such projects would be most often co-financed 15, 20 or 30 percent, but we have it over 50 percent.”

Asked to comment on the Lithuanian Energy Ministry’s deliberations to supply the gas to Ukraine, the Lithuanian leader brought up the issue of the Nord Stream pipeline, which capacity, if built, would be directed, according to her, not to supplying gas to Western Europe, but to bypassing Ukraine and attempting isolate it from the supply.

From the whole amount of financing, up to €55 million was allocated to AB Amber Grid, whereas up to €240.3 million will go for GAZ-SYSTEM S.A. The total estimated value of construction works of the Gas Interconnector Poland-Lithuania will amount to €492.2 million.

The GIPL project will integrate the gas systems of the Baltic Sea region into the internal EU gas markets in line with the European Commission’s energy security strategy to ensure that no region in Europe remains isolated. It is an achievement of close regional cooperation facilitated by the European Commission in the framework of the Baltic Energy Market Interconnection Plan initiative (BEMIP).

The planned transmission pipeline with a diameter of 700 mm will join compressor stations in both countries – the Lithuanian compressor station in Jauniūnai and the Polish station of Rembelszczyzna.  The total length of the planned pipeline amounts to 534 km, including approximately 357 km running through the territory of Poland and approx. 177 km in the territory of Lithuania. Starting capacity from Poland to Lithuania is expected to be 2.4 billion cubic meters a year and from Lithuania to Poland- 1.0 billion cubic meters a year.

 GIPL is the first gas pipeline connecting Lithuania and Poland and the first gas interconnector between the Eastern Baltic Sea region and the Continental Europe.

It is one of the energy infrastructure projects that benefits of the status of Project of Common European Interest. The EU investment for energy infrastructure under the Union’s programme Connecting Europe Facility (CEF) amounts to 5.35 billion euro for the period 2014-2020, says EC press release.

It is anticipated that the GIPL interconnector will be operational from the beginning of 2020.

“As the project design works have been purchased, they will be started and ongoing until the beginning of the year of 2017 in Lithuania and the end of the year in Poland. Throughout the process, or swiftly after it is over, tender for the project’s contractors will be announced and the actual works of the construction could be started within half-year thereafter,” Jolita Butkiene, senior officer of Strategic Planning and External Relations Division at AB Amber Grid, told Natural Gas Europe.

 Linas Jegelevicius