July 2, 2012 / 11:21 AM / 5 years ago

Poland, Lithuania move toward linking gas systems

WARSAW, July 2 (Reuters) - Polish and Lithuanian gas system operators hired an engineering firm to prepare a feasibility study of a link that would connect their pipeline systems as part of a push by the European Union to integrate Europe’s energy markets.

The study, which will be carried out by ILF Consulting Engineers, is to be ready in the first quarter of 2013 and provide the basis for further action on the project.

The connection will give the Baltic states access both to EU gas and global LNG markets.

Polish operator Gaz-System and Lithuanian utility Lietuvos Dujos, majority-owned by Russia’s Gazprom and Germany’s E.ON Ruhrgas, said earlier they expected the link to start operating in 2018.

The planned 562 km pipeline link would have an annual capacity of 2.3 billion cubic meters of gas per year, with the possibility to increase it to 4.5 bcm.

The cost of the investment’s first stage is estimated at 471 million euros ($597.7 million), of which 73 percent is to be borne by Poland and the rest by Lithuania. Expanding the link’s capacity to 4.5 bcm is to cost another 66 million euros.

“Gaz-System expects that a significant part of the investment will be financed from EU funds because this is a priority project in the scope of eliminating energy islands in Europe,” its chief executive Jan Chadam was quoted as saying in a press statement. ($1 = 0.7880 euros) (Reporting by Maciej Onoszko)

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