The Baltic countries were the first to break loose from the Soviet yoke by declaring or, to be more exact, restoring independence in early 1991. And these countries took a step to energy independence from Gazprom on October 27, when a liquefied natural gas (LNG) floating terminal arrived in Klaipeda.
This huge 294-m-long floating unit, aptly named Independence, “will be a security guarantee for the whole region… If necessary, it will be able to cover 90 percent of the three Baltic States’ gas supply needs,” Lithuania’s President Dalia Grybauskaite said at the welcoming ceremony. “Lithuania again stands proud of its strong spirit, courage, and political will. From now on, nobody will dictate us the price for gas or buy our political will.”
Meanwhile, Prime Minister Algirdas Butkevicius pointed out: “It is a historic day for Lithuania. I am glad that we are the first in Europe to build a liquefied gas terminal in such a short time.”
The EU Commissioner for Energy, Guenther Oettinger, described the arrival, broadcast live on national TV, as a “milestone” in ensuring energy security for the Baltic States. “The challenges that Europe faces today in terms of security of gas supply require a quick response, and Lithuania has shown how this can be delivered,” he emphasized. “The opening of Klaipeda LNG terminal represents a historic milestone in the Baltic states’ energy security,” US Secretary of State John Kerry said in a letter to Lithuanian leaders, commending their “strategic vision.”
The South Korean-built ship is at the same time a terminal for gas-transporting vessels and a storage unit for liquefied gas. Lithuania has no other possibilities for storing gas. It is still a commercial secret where the country will be buying the “blue fuel.” Among the options are the US, Norway, and Qatar. Lithuania will be paying Norway about 69 million dollars a year for leasing the vessel. The country will be able to buy the ship out in 10 years’ time, but it has not been disclosed how much this will cost.
It will be recalled that, in spite of joining the EU and NATO in 2004, Lithuania was fully dependent on natural gas supplies from Russia. The terminal will enable Lithuania, a country with a population of three million, to import up to 4 billion cu.m. of gas a year from, for example, Norway’s Statoil from 2015 onwards. It is much more than the 2.7 billion cu.m. Lithuania bought from Russia last year, which leaves additional opportunities for its Baltic neighbors Latvia and Estonia.
Incidentally, Lithuania is not going to stop at this. To obtain access to the EU’s gas market, Vilnius also plans to build a gas pipeline to the neighboring Poland by 2019.
The Day has requested Bohdan SOKOLOVSKY, former authorized presidential representative for the international aspects of energy security, to comment on the importance of the commissioning of the Lithuanian terminal for the region and to explain why that country in fact managed to achieve independence from Gazprom in a short period of time.
“COMMISSIONING THE TERMINAL IN LITHUANIA IS A BLOW TO GAZPROM”
“I am sure that commissioning the terminal in Lithuania is, above all, a blow to Gazprom. It is a real step which has been silently taken in the past five years to make all the Baltic States independent in terms of energy. It means eliminating the dependence on Russia at least in gas. Lithuania is showing an example of how to work. One must speak less, do more, and get rid of Gazprom dependence.
“Many are asking whether this will affect the financial position of Gazprom. Yes, it will a little. On the whole, the Baltic countries have not been receiving too much Russian gas – about 3 billion cu.m. or a bit more. It is not big money in the dollar dimension. But if you gather all the drops together, this will have a not so good effect on Gazprom’s financial situation.
“This Lithuanian terminal is important for many countries. Lithuania will be building a gas pipeline to Poland to diversify gas supplies and avoid any surprises on the part of other countries. Incidentally, the Poles are also silently finishing the construction of an LNG terminal in Swinoujscie and hope for large gas deliveries.”
“THERE WILL ONLY BE GOOD RELATIONS IF WE REDUCE ENERGY DEPENDENCE ON RUSSIA”
What conclusions must the current Ukrainian leadership draw in this situation? For there was so much talk here about the construction of an LNG terminal, but things haven’t got forward an inch.
“The current situation says that we should build a terminal as soon as possible instead of talking about one, which we have been doing in the past few years. We’ve been talking for four years or so, signing papers, and doing nothing. We must build [a terminal], but, first of all, we must cut down on consumption. For, unlike Poland or the Baltic countries, we produce gas – about 20 billion cu.m. a year. It is very much. And we consume too much gas – for example, 50 billion cu.m. last year. It is very much. In other words, we have a capacity for development. For example, Poland, which is comparable to us in terms of population, territory, and economic structure, consumes an annual 14-16 billion cu.m. of gas, whereas we do over 50 billion. This shows where we should go to – we must, above all, reduce what we ourselves do not extract. We have to do this under the whiplash, but we must reduce energy dependence on Russia – only then will there be good relations.
“I just wonder who stands to gain in this situation by trying to persuade the minister, the premier, and the president to buy 5 billion cu.m. of gas from Russia. We are expected to consume 35-37 billion cu.m. this year. Things may be not as good as they used to be, when we consumed 50 billion cu.m. It will perhaps be colder, but we will not freeze, having this amount of gas. I can’t see why we must buy 5 billion cu.m. from Russia.”
Do you think Ukraine should not have taken part in those negotiations at all?
“That was absolutely unnecessary. It’s better to suffer some privations for just one year. And we should have started the negotiations on the supply of non-Russian gas in March and April, not in September. It is good that we managed to make a deal with Norway in September and began to receive the deliveries, but this could have also been done earlier.”
And what do you think about the position of Europe which insists that we must pay off the Gazprom debt and, in this connection, sign a new agreement on gas supplies?
“Firstly, Europe’s position is not exactly clear to me. Secondly, we should explain things better to Brussels. Europe does not even know that Russia owes us a debt – it robbed us of 140 billion dollars in 1992. We are too tolerant and have not been explaining things to Europe. This is why Europe does not know much about the gas situation in Soviet and present-day Ukraine. Europe has never pondered on why the gas price in Ukraine is far higher than the price for Russian gas on European markets. We keep silent about all this. It is therefore little wonder that Europe demands – on what it considers to be ample grounds – that we pay off the debt.”
