Energy, EU – Baltic States, Gas, Lithuania, Port, Transport

Experts believe that the demand for gas, albeit decreasing, will remain strong enough for Lithuania to maintain LNG infrastructure. They say that planned gas interconnections between Lithuania and Poland and between Estonia and Finland will provide an alternative route of supply, but will not completely replace the terminal.

Romas Svedas, a former Lithuanian deputy energy minister, says that despite expectations that renewable energy will replace fossil fuels, the energy sector is changing slowly.

The energy expert notes that, based on the International Energy Agency's forecasts until 2040, gas consumption will grow worldwide and gas will overtake oil as the primary fuel in the European Union.

"Loud statements and discoveries in the field of renewing energy should not deceive us into believing that this is really very progressive, modern and fashionable. On the other hand, it is a fact of life that we must ensure the supply of energy to industry," he said.

The Baltic gas market is set to change once planned major infrastructure projects are carried out. Gas Interconnector Poland-Lithuania (GIPL), slated to be completed in 2021, will connect Lithuania, Latvia and Estonia to Poland and open access to Western European markets. The Baltic Connector is expected to link Estonia to Finland in 2020.

However, Reinis Aboltins, a Latvian energy expert, says that these projects are unlikely to make the LNG terminal redundant.

"I really don't see how the Klaipeda LNG terminal can lose its importance, because LNG production will remain competitive globally. Let me quote Mark Twain who said that 'the reports of my death are greatly exaggerated'," he told BNS.

However, Linas Balsys, a lawmaker and the chairman of the Lithuanian Greens Party, doubts if the country will need the LNG terminal in the future as he expects renewable energy to displace conventional technologies.  

"We have invested a great deal in the LNG terminal. This creates problems, because if you invest in something, it has to do something and work. We are unlikely to stop using gas so soon, but the thing is that since we have LNG, in which a lot of money has been invested, we are obliged by law to buy and consumer that gas," he told BNS.

According to Balsys, the likely growth in renewable energy after 2024 and the emergence of an alternative gas supply route via Poland makes the outlook for the LNG terminal vague.

After Lithuania failed to persuade Latvia and Estonia to jointly apply for EU support, the government has to decide whether or not to purchase the FSRU after the lease contract expires. Energy Minister Zygimantas Vaiciunas says that "we have to be sure that such a facility would be needed after 2024 before mapping out possible scenarios".