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Lithuanian Energy Policy

The priorities of Lithuanian energy security for the most part do not differ from Western European countries. There may be emphasized three main tasks for ensuring energy security of Lithuania:
1. Ensuring reliable energy supply and functionality of energy infrastructure;
2. Diversification of energy supply sources;
3. Reduction of dependence on energy resource import (by reducing energy intensity and switching to alternative or renewable energy recourses).
The Lithuanian National Energy Strategy has been adopted in January 2007, and it highlights the problems that Lithuania is facing: “Lithuania’s electricity networks are not interconnected with Poland’s networks, insufficient progress has been made towards increasing the reliability of natural gas supply. ... A decision on the decommissioning of the Ignalina NPP in 2009 has exacerbated the problem of Lithuania’s energy security.” The document acknowledges, that Lithuania should approach these problems from a regional perspective, since it would be nearly impossible for Lithuania to deal with them on her own. Key problems include the long-term reliability of natural gas supply, construction of the prospective new nuclear power plant and integration of the electricity system into EU systems. Implementation of these strategic tasks could be facilitated only by close co-operation with other Baltic countries – Estonia, Latvia and Poland.

The Lithuanian energy strategy also presents the strengths and weaknesses of the Lithuanian energy sector. Main strengths are a currently good balance of consumption (which will change after the closing of Ignalina nuclear plant), well developed energy capacities, such as refineries, terminals and other. The main weaknesses on the national level are the decommissioning of the Ignalina Nuclear Power Plant and energy efficiency. Lithuanian Seimas also points out that Lithuania’s electricity and gas networks do not have any direct links to Western European energy systems and that there is no alternative supply of natural gas, leaving Lithuania dependence on a single supplier. The strategy also promotes alternative projects such as the new liquefied gas terminal in the Baltic region, which would substantially reduce dependence on the single source of natural gas from Russia. Construction of gas pipelines to Eastern Europe from alternative sources, such as the Caspian Sea region or Norway and interconnection of gas pipeline networks of Lithuania and Poland, Lithuania would acquire possibilities of alternative gas supply.

Lithuania – Russia

The tension in the energy field between Lithuania and Russia started accumulating right from the independence. In the winter of 1992-1993, Yeltsin cut energy supplies to Estonia, Latvia and Lithuania in order to affect a policy change and claiming their failure to pay a four-fold increase in energy price, which followed their demands to remove Russian troops from the Baltic countries. In mid-February 1992 all oil supplies were cut to Lithuania for four days. This was done in order to enforce Russian demands concerning the amount and forms of payments.
Between July and August 1992, Russia again cut all oil deliveries, reduced gas supplies by 55 per cent due to Lithuania’s debts, and stated that Lithuania was not allowed to re-export any of the Russian oil in order to acquire hard currency. In the late fall of 1992, Russia again cut supplies, this time in such a way that it stopped work at the Mažeikių refinery. All in all, in the time frame between 1998 and 1999, oil supplies on behalf of Transneft were cut on nine occasions. According to Lithuania the underlying cause of these supply interruptions was that Russia wanted Lithuania to cede control over pipelines, ports and refineries to Lukoil. 

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Recommendations

A natural question thus arises: is there anything Lithuania could do and what direction should be adopted. Janeliunas and Molis suggest, that Lithuanian interests would best answered by developing cooperation with Poland (concerning the Odessa-Brody pipeline prolongation till Gdansk and possible supply to Lithuania through Gdansk terminal) as well as Ukraine (concerning the transportation of oil through Odessa-Brody-Plotsk-Gdansk pipeline by projected direction). The Odessa-Brody-Plotsk-Gdansk pipeline could also be used to transport oil from South Caucasus states.

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Lithuanian energy challenges. Recommendations

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