Baltic gas interconnection

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Baltic gas interconnection

The President of the European Commission, Jean-Claude Juncker, has welcomed the signing of the grant agreement on the GIPL (Gas Interconnector Poland – Lithuania), the first pipeline connecting Poland and Lithuania, which will end the long lasting isolation of the Baltic Sea region and bring the energy needed for a new economic dynamism to the region.

The agreement is an important step towards increased security of supply for the European energy market, as witnessed by the participation at the signature ceremony of President Juncker, Polish Prime Minister, Ewa Kopacz, the President of Lithuania and former EU Commissioner, Dalia Grybauskaité, Latvian Prime Minister, Laimdota Straujuma and the Prime Minister of  stonia, Taavi Rõivas.

Participating Member States show how fundamental joining forces could be to make the European Union stronger and more resilient to potential shortages, not only with a ’one-shot’ approach, but by carrying on long-term common efforts to further reinforce the region’s integration into the EU’s internal energy market.

Building missing cross-border links between the Baltic Sea region and the rest of the EU energy market is a priority for the Commission, which has committed itself to enhancing the links allowing energy to flow where it is most needed and to ensure that every Member State has access to at least three sources for energy.

On the occasion of the signature of the joint declaration, President Juncker said:

“Today’s signature is about European solidarity. It is about leaders taking responsible decisions to increase our security and strengthen our resilience. Today we have done much more than bringing the energy isolation of the Baltic States to an end. We have brought the region further together. Today we have  agreed on European infrastructure that ill unite us, instead of dividing us.”

The agreement will enable the promoters to start construction works with the aim of finalising the pipeline by December 2019. The Baltic States and Poland will mandate their Ministers in charge of Energy Policy to monitor the implementation of the project and ensure its construction according to the agreed timeline. On the occasion of the signing the Heads of State or Government present issued a statement confirming their commitment to continue working on further interconnecting and strengthening the resilience of their energy markets.

The total cost of construction of the project is estimated at 558 million euros funded by the Baltic States and private investment alongside the Commission’s contribution under the  connecting Europe Facility (CEF).

The gas pipeline will stretch some 357 km in Poland and 177 km in Lithuania, being capable of delivering 2.4 billion cubic meters of gas per year from Poland to Lithuania, as well as 1 billion cubic meters of gas per year from Lithuania to Poland.

GIPL is the first gas interconnector between the Eastern Baltic Sea region and Continental Europe and is one of the energy infrastructure projects that benefits from the status of Project of Common European Interest”, i.e. projects which are critical for completing the European internal energy market and for the attainment of the Commission priority to establish an Energy Union to secure, affordable and sustainable energy.

The EU investment for energy infrastructure under the Union’s programme Connecting Europe Facility amounts to €5.35 billion for the period 2014-2020.

Part of this investment will take the form of financial instruments aiming to leverage private financing for infrastructure development. The bulk of this EU support fund will be used to provide support to commercially non-viable projects in the form of grants like the GIPL.

The EU seems to be paying the utmost attention to the Baltic region energy links. As gas and electricity infrastructure in the Eastern Baltic Sea region is not sufficiently interlinked, the Commission has agreed on an Action Plan and Memorandum of Understanding strengthening the Baltic Energy Market Interconnection Plan (BEMIP). The Plan foresees, inter-alia, further efforts to end the energy isolation of the Baltic States and to integrate the region into the European Network and it was signed by the Commissioner for Energy and Climate, Miguel Arias Cañete, and Energy Ministers of the participating Member States on 8 June 2015. BEMIP has become the most prominent of all the regional cooperation initiatives in the Baltic Sea region.

GIPL is not alone, other projects in the Eastern part of the Baltic Sea region are also obtaining the status of a Project of Common Interest, such as the gas interconnector Estonia – Finland (Balticconnector) as well as the underground gas storage in Inčukalns (Latvia).

Moreover, the regional Baltic LNG terminal, the strengthening of the transmission network of the Baltic States and primarily between Lithuania and Latvia as well as between Latvia and Estonia, the interconnector linking Poland to Denmark (BalticPipe) and the LNG Terminal in Świnoujście (Poland) are also central to establishing a well operating gas market in the Eastern Baltic Sea region.

In the electricity sector, key projects contributing to the enhanced integration of the Baltic States with the EU market are: interconnections between Lithuania and Sweden (NordBalt) and Poland (LitPol Link) to be inaugurated in December 2015, and the second interconnection between Estonia and Finland (Estlink II) that has been operational since 2014. These interconnections are important for the future synchronisation of the Baltic States with the rest of the EU.

Filippo Giuffrida Répaci

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