Gazprom CEO Says LNG Terminal In Kaliningrad Zeroes Out Risks Of Gas Transit Via Lithuania

MOSCOW (UrduPoint News / Sputnik - 14th January, 2019) The construction of a liquefied natural gas (LNG) receiving terminal in the Kaliningrad Region � Russian exclave between Poland and Lithuania on the Baltic Sea � has completely nullified the risks of gas transit through the territory of Lithuania, one of NATO member states, Gazprom CEO Alexey Miller said in an interview.

"I must say that any transit risk is different from zero, especially when gas from Russia to Russia is transported through the territory of a NATO country. Therefore, Russian President Vladimir Putin set the goal to completely nullify risks of transit via Lithuania, which means creation of an absolutely independent, guaranteed, reliable route for gas deliveries to Kaliningrad Region. And this assignment has been fulfilled," Miller said in an interview with the Rossiya 2 broadcaster.

Simultaneously with the autonomy of gas deliveries, the problem of autonomous electricity production in the Kaliningrad Region was solved, he noted.

Miller clarified that with the launch of the terminal, the imbalance of interests in the transit contract with Lithuania, which arose after the launch of the country's own LNG terminal, was eliminated.

"When Lithuania built its own liquefied natural gas terminal, the balance of interests was disturbed. Lithuania strengthened its negotiating position on the transit agreement, because Lithuania had two gas supply routes: by land and from the sea, two sources of gas supply. Currently this imbalance has been completely eliminated," the head of Gazprom said.

At the same time, he acknowledged that LNG supplies to Kaliningrad were more expensive than pipeline gas supplies through Lithuania.

"Without a doubt, deliveries of liquefied natural gas by sea at such a distance are more expensive than deliveries of pipeline gas. Russian President Vladimir Putin said at the opening ceremony of the receiving terminal that this price difference will definitely not fall on the shoulders of the final consumer of gas in the Kaliningrad Region," the top manager explained.

Within the project of the autonomous gas deliveries to the region, a plant for liquefying natural gas in the area of the Portovaya compressor station is being built.

"The plant will be built in 2019 ... At a time when Kaliningrad Region will not need liquefied natural gas, we will simply offer it on the market," he added.

In early January, a marine terminal for receiving natural gas and Russia's only floating storage regasification unit, the Marshal Vasilevsky tanker, were commissioned in Kaliningrad Region. The terminal and the regasification unit provide the capacity for receiving gas by sea transport in the amount of up to 3.7 billion cubic meters (130.7 billion cubic feet) of natural gas per year.

In 2015, Gazprom and Lithuanian AB Amber Grid signed a new contract for the transit of Russian gas via Lithuania to Kaliningrad Region. The contract was signed for 10 years and provides for the transit of gas in the amount of up to 2.5 billion cubic meters per year.