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Lithuania approves FLNG construction

LNG Industry,

The Lithuanian government has finally approved the floating LNG terminal (FLNG) project, which has been in the works for two years, on economic grounds. It is planned to float in the Baltic Sea, off the Lithuanian coastline, but an exact location has not been chosen yet. The aim of the new project is to reduce Lithuania’s dependence on energy from its eastern neighbour, Russia, and hopefully avoid politically motivated cuts in energy supplies.

Lithuania’s Prime Minister, Andrius Kubilius said, “The decision is very important, however, it is not the only step in realising the government’s strategy to seek full energy security.”

The FLNG terminal is expected to have a capacity of 3 billion m3/yr, which will satisfy all of Lithuania’s current gas needs. The government owned company Klaipedos Nafta will be created to run the installation; private companies have also been encouraged to get involved though.

The principal reason for this FLNG terminal to be constructed is cost. Currently, 1000 m3 of gas costs Lithuania US$ 100 more than their European counterparts, according to the Prime Minister. Lithuania’s neighbour Belarus has also shown an interest in the project.

The Lithuanian Prime Minister has met with his Belarusian counterpart, Sergei Sidorski to discuss the possibility of working together on the project. However, a separate FLNG terminal may need to be constructed as the planned terminal will not be large enough to satisfy both Lithuania’s and Belarus’ gas needs. Lithuania needs a maximum of 3 billion m3/yr of gas, while Belarus needs 8 – 10 billion m3/yr; two parallel FLNG terminals may be the best option.

"Our yearly needs consist of a maximum of 3 billion m3 of natural gas while Belarus needs an additional eight to 10 billion m3 per year.

"Construction of the latter terminal would be much more difficult, so we treat it only as a separate possible project," said Andrius Kubilius.

The reason this is all necessary is because Lithuania receives its gas through pipelines which transit through Belarus. Due to a row over transit fees between Russia and Belarus, Lithuania’s supplies dipped by 40% in March.

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