Viewing cable 07VILNIUS811
Title: LITHUANIA HOPING TO MOVE AHEAD ON ENERGY ISSUES

IdentifierCreatedReleasedClassificationOrigin
07VILNIUS8112007-11-13 06:56:00 2011-08-30 01:44:00 CONFIDENTIAL Embassy Vilnius
VZCZCXRO4431
RR RUEHDBU RUEHFL RUEHKW RUEHLA RUEHROV RUEHSR
DE RUEHVL #0811/01 3170656
ZNY CCCCC ZZH
R 130656Z NOV 07
FM AMEMBASSY VILNIUS
TO RUEHC/SECSTATE WASHDC 1772
INFO RUEHZL/EUROPEAN POLITICAL COLLECTIVE
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
C O N F I D E N T I A L SECTION 01 OF 02 VILNIUS 000811 
 
SIPDIS 
 
SIPDIS 
 
COMMERCE FOR ITA:LMARKOWITZ 
 
E.O. 12958: DECL: 11/13/2017 
TAGS: ENRG ECON EPET LH
SUBJECT: LITHUANIA HOPING TO MOVE AHEAD ON ENERGY ISSUES 
 
REF: VILNIUS 796 
 
Classified By: Ambassador Cloud for reasons 1.4 (b) and (d). 
 
¶1.  (C) Summary.  DCM met November 7 with Darius Degutis, 
MFA, Ambassador at Large, Economic Security Policy 
Department.  Degutis's direct responsibilities include 
international energy projects such as the proposed Polish & 
Swedish power bridges and the new Ignalina Nuclear Power 
Plant (INPP).  He told us the planned power link with Sweden 
is moving forward following the recent signing of the first 
stage of the feasibility study.  Although the Polish power 
bridge is temporarily in limbo due to recent Polish demands 
to link signing of a bridge agreement with a guarantee of 
power from the new INPP, Degutis was optimistic an agreement 
could be reached in the near term with the new Polish 
government.  He said President Adamkus will visit Poland 
November 11 and Sweden November 13-14 and will try to 
expedite these projects.  End summary. 
 
Polish Power Bridge 
------------------- 
 
¶2.  (C) The first segment of the Polish power bridge could be 
ready by 2012 if a project company of equal Polish and 
Lithuanian ownership is established by January 1, 2008, 
according to Degutis.  The first segment of the bridge would 
connect the Kruonis hydro power station with Alytus, 
Lithuania and Elk, Poland.  According to Degutis, the Poles 
see the business logic in connecting the Kruonis power 
station to the bridge.  (in contrast, the Economy Minister 
told the Ambassador October 25 Poland did not accept the 
offer of Kruonis generated power in lieu of a guarantee of 
power from the new INPP (reftel)). 
 
¶3.  (C) Polish demands to link the construction of the power 
bridge to a guarantee of at least 1,200 MW from the new INPP 
derailed a September plan to sign an agreement between Polska 
Grupa Energetyczna and Lietuvos Energija, the two companies 
involved in the power bridge project.  Degutis echoed what 
the Minister of the Economy told us October 25th (reftel): 
Lithuania cannot guarantee for any partner in the new INPP 
project, including itself, a specified amount of electricity 
because no one yet knows the generating capacity of the new 
INPP.  Degutis added that Lithuania remains ready to sign an 
agreement for the power bridge with Poland (delinked from 
INPP issues) and hopes that the agreement will be signed 
soon.  Degutis remarked that the feasibility study for the 
Polish power bridge stated that the project was economically 
viable without a power guarantee from the new Ignalina plant. 
 He said the Poles will be able to upgrade their power 
infrastructure in Northeastern Poland, in preparation for the 
power bridge, using EU funds. 
 
¶4. (C) Degutis stressed that linking Lithuania with the 
Western European power grid is not indicative of a pan Baltic 
desire to cease electricity trading with Russia.  Transfer 
stations will be established on the eastern borders of the 
Baltic countries so electricity can be traded between the two 
grids.  Lithuania's goal, however, is a synchronous 
connection for Lithuania with the Western European power grid 
(UCTE). 
 
Swedish Power Bridge 
-------------------- 
 
¶5.  (C) Degutis said that the GOL hopes this project will 
also be completed by 2012.  He explained that November 5 
Lietuvos Energija and Svenska Kraftnat signed the first stage 
of the feasibility study and an environmental study will be 
done as well.  President Adamkus will visit Stockholm the 
week of November 12 and will try to expedite the process. 
(The local Swedish embassy told us the same day that it was 
not happy Lithuania is trying to treat the power link as a 
bilateral governmental issue, rather than a private sector 
project). 
 
Ignalina NPP 
------------ 
 
¶6.  (C) Degutis said the GOL hopes the proposed INPP will be 
a 2 unit, 3,200 MW plant.  The GOL's minimum requirement is 
1,100 MW.  Degutis stressed, however, that they will not know 
how large a plant can be built until after the project is 
fully scoped and the environmental impact study determines if 
the adjacent Druksiai lake has enough cooling capacity for a 
large NPP, or whether other technology exists to cool the new 
INPP in other ways.  Degutis said the GOL hopes the INPP 
would be completed by 2015 but that might slip 1 or 2 years. 
Degutis cautioned that the construction of the new INPP must 
 
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be taken step by step.  The task at hand for the GOL is 
establishing a national investor company in Lithuania for the 
new INPP, which he presumed will be done in December 2007 or 
January 2008, after asset valuation of the three Lithuanian 
firms that will make up the national investor is complete. 
 
¶7.  (C) Degutis said he did not expect EU permission to keep 
the old INPP open past the accession treaty requirement of 
¶2009.  Lithuania is now adding power generating capacity to 
make up for the loss from the closure of the old INPP. 
However, this capacity will rely upon fuel (natural gas) from 
one, not recently reliable source: Russia.  Degutis expressed 
the hope that the EU would intervene, if necessary, with 
Poland and Sweden to ensure that Lithuania's power links with 
Western Europe were built in a reasonable amount of time. 
 
Liquefied Natural Gas (LNG) 
--------------------------- 
 
¶8.  (C) Degutis said that LNG is a priority for the GOL, and 
noted that the Ministry of the Economy is reviewing a pan 
Baltic LNG option.  (NOTE.  This comment differs from the 
Minister of the Economy's statement that Estonia and Latvia 
expressed little interest in Lithuanian overtures to discuss 
an LNG terminal.  Thus, Lithuania would consider a terminal 
of its own in Klaipeda). 
CLOUD