How Lithuania cut its ties to ‘toxic’ Russian gas – POLITICO

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Twelve years in the past, Lithuanian firm administrator Rokas Masiulis was handed a brand new job with an bold goal: finish his nation’s reliance on Russian gasoline. 

In his new submit as head of Klaipėdos Nafta, a state-controlled oil terminal operator, Masiulis was to supervise the commissioning and supply into service of a floating liquefied pure gasoline (LNG) terminal off Lithuania’s Baltic coast 

The ship — which was named Independence and went into service in 2014 — was constructed to make sure Lithuanian shoppers may nonetheless get gasoline even when political relations with Russia soured to such an extent that provides from the east needed to be switched off. 

Earlier this month, because the brutality of Moscow’s invasion of Ukraine grew to become ever clearer, Lithuania’s authorities flipped that swap, saying that it had grow to be the primary European nation to cease all imports of “toxic” Russian gasoline. The Independence proved its value and Lithuania’s gasoline provides remained secure.

“I was excited about the Independence project when we took it on, but I couldn’t imagine how big a deal it would ultimately be,” mentioned Masiulis, who went on to be Lithuania’s vitality and transport minister and today runs a state-controlled electrical energy grid supervisor. 

Useful case examine

Reducing Russia’s profitable gasoline provides to the West is a key problem going through European leaders as they develop their response to Moscow’s assault on Ukraine and search to sap the Kremlin’s warfare chest. 

“Years ago my country made decisions that today allow us with no pain to break energy ties with the agressor. If we can do it, the rest of Europe can do it too!” tweeted Lithuanian President Gitanas Nausėda. The nation additionally mentioned it’s going to cease shopping for Russian oil, though it stays linked to the Russian electrical energy grid.

A specific focus is Germany, Europe’s industrial powerhouse, which generates round 15 % of its electrical energy from gasoline, and which sources about half of its gasoline from Russia.

German Climate and Economy Minister Robert Habeck has mentioned it’s going to take till 2024 for Germany to wean itself off Russian gasoline, leaving lawmakers in Kyiv more and more pissed off.

“As long as the West continues buying Russian gas or oil, it is supporting Ukraine with one hand, while supporting the Russian war machine with the other hand,” Ukrainian Foreign Minister Dmytro Kuleba advised reporters in Brussels in early April. 

“We don’t understand how you can make money out of blood,” President Volodymyr Zelenskyy advised the BBC.

Lithuania’s Independence, a so-called Floating Storage Regasification Unit, or FSRU, may supply a helpful case examine for these trying to pivot away from Russian gasoline. LNG is pumped onto the vessel from a transport ship the place it’s turned again into gasoline to be used or storage.

FSRU methods may be constructed comparatively rapidly — venture lengths are estimated at between one and three years — and usually require fewer planning permits than a everlasting land-based equal. They may be moved from place to position and swapped out for larger or smaller models as wanted with comparative ease.

Importantly, in addition they enable a rustic to choose and select the place its LNG provides come from: Lithuania at present sources a lot of its LNG from Norway, the U.S. and Qatar.

FSRU tasks are seen nearly as good options for smaller international locations like Lithuania, which consumes round 2 billion cubic meters (bcm) to three bcm of gasoline per yr, mentioned Zongqiang Luo, a gasoline market analyst with Norway-based consultancy Rystad Energy. Lithuania acquired a few quarter of its gasoline from Russia final yr.

For a rustic like Germany, which wants round 90 bcm a yr, such a system may nonetheless be helpful as a part of a broader set of options which may additionally embrace gasoline piped from Norwegian and Dutch gasoline fields, in addition to energy-saving measures.

Italy, the Netherlands, and Estonia have mentioned they’re taking a look at FSRU tasks, whereas Berlin is planning three such models which may ship 27 bcm of gasoline a yr.

Habeck visited Qatar lately to debate LNG provides.

“This can work,” he advised broadcaster DW after the go to.

Latvia and Estonia additionally mentioned they will finish Russian gasoline imports. The area is not but linked to the EU-wide gasoline grid, one thing that may occur in May when a connector to Poland is partially accomplished.

Although Lithuania now not buys Russian gasoline for home consumption, Russian gasoline nonetheless flows by way of its pipeline community to the Russian enclave of Kaliningrad.

Troubled historical past 

Tensions between Russia and Lithuania over vitality provides date again to the early Nineteen Nineties, when each international locations have been looking for to rebuild their economies after the collapse of the Soviet Union.

In the winter of 1992, in one among a sequence of makes an attempt to use political stress to Vilnius, Russian President Boris Yeltsin stopped oil provides to its Baltic neighbor after fee disputes.

In the years that adopted, Vilnius accused Russian gasoline big Gazprom of abusing its monopoly place by charging Lithuanian clients inflated costs.  

Lithuania finally misplaced a long-running compensation case in a Stockholm court docket over that declare, however on the identical time, the Baltic state’s management was devising one other method to wrest again energy from Gazprom: the Independence venture. 

In 2010, former Energy Minister Arvydas Sekmokas referred to as Masiulis to his workplace on the tree-lined Gedimino Avenue within the capital Vilnius and provided him the highest job at Klaipėdos Nafta, which he accepted. 

Lithuania’s contract with Gazprom was set to run out in 2015 and Masiulis understood that by that point, a brand new FSRU unit needed to be moored and able to go in Klaipėda harbor. 

Masiulis started sounding out firms with the know-how to supply an FSRU vessel. 

In early 2012, Norway-based Hoegh LNG introduced it had received the Lithuanian contract and it tasked South Korean shipbuilder Hyundai to get to work on the Independence. 

A raft of specialist package, together with a regasification system from China and a docking system from Denmark, have been additionally commissioned for the $330 million venture. In Lithuania itself, private and non-private sector gamers have been being pushed onerous to make sure the venture met its deadline, fast-tracking selections and dealing lengthy hours.

The tempo continued till October 27, 2014 when the Independence lastly drew alongside its new jetty in Klaipėda to be met by Masiulis, who had been made vitality minister a month earlier by then-President Dalia Grybauskaitė, a staunch supporter of the venture. 

“We are now an energy-secure state,” she mentioned. 

As the gasoline from the ship started to movement, lawmakers in Vilnius famous a secondary profit that they had not banked on.

As nicely as offering them with higher vitality safety, the brand new competitors from the Independence additionally pushed Gazprom into dropping the worth of the gasoline it piped to Lithuania by a few fifth.

“It was both a political and economic win,” Masiulis mentioned. 

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