LNG, Shale Gas Make Headlines in Lithuania
Announcements out of Lithuania today reveal a move away from Russian gas dependence as it appointed Norway's Hoegh LNG as builder of an offshore platform and Polish LOTOS makes plans to drill for shale gas in the country.
After a meeting with the Lithuanian Prime Minister, Pawel Olechnowicz, president and CEO of LOTOS, said the company will start drilling for shale and plans to take part in a tender to obtain new licenses later this year.
Preliminary estimates show there may be up to 120 billion cubic metres of shale gas reserves in Lithuania, according to government documents.
"We decided to start with the first drilling for shale gas or shale oil, let's see what is underground," Olechnowicz told reporters. "We will make the first tests this year," he added, declining to specify the timing.
This news comes at the same time the country chose Hoegh to supply a floating storage regasification unit (FSRU), and that operations were expected to start at the end of 2014.
An FSRU is cheaper and faster to build than a fixed LNG terminal on land.
Klaipedos Nafta said that the FSRU had been ordered in South Korea and will have a capacity of 170,000 cubic meters of LNG.
LOTOS in Lithuania
The Polish government holds a 53 percent stake in Lotos, it was reported that Poland's second-largest refiner, which controls Lotos Geonafta, and holds 50 percent of Minijos Nafta.
"Minijos Nafta will be the first company in Lithuania to explore the shale in Lithuania. We have been working on this for two years already," Thomas Haselton, the CEO of Minijos Nafta, told a news outlet.
"Our specific exploration plans with regard to shale this year are to frac one of our existing wells within the shale zones, probably in the spring, and to drill a new well specifically for shale hydrocarbons in the summer or fall of this year," he added.
A separate license to explore shale for hydrocarbons is not required in Lithuania, according to government officials, but there could be environmental requirements to be met.
"It is too early to say whether Lithuania will produce and oil or gas from shale, but there is a reasonable chance that hydrocarbons could be produced from shale in the southwestern part of Lithuania," Haselton said.
Lithuania's State Geological Service plans to call a tender in spring to issue new licenses to explore for hydrocarbons, including shale gas, at two new fields close at the border with Poland and with Russia's enclave of Kaliningrad.
The fields cover about 2,000 square km, while already issued licenses cover a territory of about 6,300 square km.
"We are also prepared if there is going to be issued an new run for new concession here in Lithuania... Lotos Geonafta is going to be a partner of that," Olechnowicz told reporters.
In May 2011, Lotos which has been engaged in exploration and production of oil and conventional gas on the Baltic Sea in Poland, had expanded its licenses to include shale gas.
At that time, Olechnowicz, was quoted as saying: “It is very likely that there is unconventional gas within the sites covered by our sea concessions. Lotos has already received six sea shale concessions and tries to obtain four more."