The European Commission’s Innovation and Networks Executive Agency (INEA) has signed an agreement with the Lithuanian and Latvian gas transmission system operators on financing construction works for the project to enhance the capacity of the interconnection between Lithuania and Latvia. Total investment for this project will amount to EUR 10.2 million.
Lithuanian investment in this project will reach EUR 4.7 million. The European Commission has allocated EU support for the construction phase of the enhanced Latvia–Latvia interconnection under the Connecting Europe Facility (CEF), covering up to 50 per cent of eligible project costs, i.e. as much as EUR 2.1 million for Lithuania’s part.
‘In the context of regional gas market development and the future interconnection with Poland, a gas transmission infrastructure between Lithuania and Latvia which better meets the needs of system users is an extremely significant element of the overall regional gas system. This was clearly demonstrated by the favourable situation this year: gas transmission volumes from Lithuania to Latvia were more than 2.5 times higher than last year. This was conditioned by the value created by the Klaipėda LNG terminal and the synergy with the Inčukalns underground gas storage facility, which offered more flexible services to market participants and favourable gas prices to gas consumers’, said Nemunas Biknius, acting CEO of Amber Grid.
Once the project is completed by the end of 2023, the increased gas transmission capacities between Lithuania and Latvia will also be extremely valuable due to the advantages provided to the gas market by the Gas Interconnection Poland–Lithuania (GIPL), which will already be in operation by that time.
‘The enhancement project of the Lithuania-Latvia interconnection capacity is relevant for the entire Baltic region and Finland, whilst affecting several current natural gas infrastructure projects. It only proves that development of natural gas infrastructure does not stop at the borders of one country. To the contrary – utmost improvement of the natural gas infrastructure can be reached when international projects are planned consecutively and are mutually integrated. In such case, maximum benefit is gained also by users of the natural gas system. Improvement of the Latvia-Lithuania interconnection will impact the Inčukalns underground gas storage, Klaipēda liquefied gas terminal, operation of the Poland-Lithuania interconnection, as well as the future single natural gas market which will start operating already in January next year. The objective of the project is to increase the Latvia-Lithuania interconnection capacity by 70-80% on average, achieving it through improvements in the current infrastructure’, said Zane Kotāne, Chairwoman of the Board of AS Conexus Baltic Grid.
In addition to capacity enhancement of the Klaipėda–Kiemėnai pipeline and the GIPL, enhancement of the Lithuania–Latvia interconnection is the third European project of common interest that Amber Grid is involved in.
The 2018 feasibility study and cost-benefit analysis for the project for Enhancement of Latvia–Lithuania Interconnection confirmed that in order to ensure regional gas market needs and the security of gas supply after the gas interconnections between Finland and Estonia and Poland and Lithuania have been completed, larger capacities will be required. Balticconnector, the new gas interconnection linking Estonia and Finland, will commence operations on 1 January 2020.
On the Lithuanian side, the project entails increasing the capacities of the Kiemėnai gas metering station and reconstructing the gas pipeline in the vicinity of the Panevėžys compressor station, while on the Latvian side, work will be done to reconstruct the gas pipelines so that the maximum allowable operating pressure can be increased from 40 to 50 bar. The investment will increase the gas interconnection capacity to Latvia up to 130.47 GWh per day (as opposed to the current 67.6 GWh per day), and up to 119.5 GWh per day to Lithuania (as opposed to the current 65.1 GWh per day). Public procurements for design works in the territory of Lithuania will be announced in the near future. Construction work procurement is tentatively scheduled for the second half of 2021.
The project is being implemented by Lithuanian TSO Amber Grid together with Latvian TSO Conexus Baltic Grid.
