Baltic states business: Lithuania attempts to depart from Russian energy market

Lithuania attempts to depart from Russian energy market

The Baltic state imports nearly all its natural gas - about 3 billion cubic meters per year - from Russia. In order to diversify away from Russian energy, Lithuania has been building up a domestic liquefied natural gas terminal and developing its nuclear industry. Such project requires significant investment which is refundable in future as a long term project.


Lithuania, likewise has depended heavily on Russian energy commodities and now Lithuania is planning to replace its Ignalina nuclear power plant, which was fully closed in 2009, with the Visaginas nuclear power plant. Vilnius hopes to complete the Visaginas project by 2020-2022. If construction moves forward, the plant will attach money funds more than $6.1 billion and will be built by Japan’s Hitachi, Ltd. The plant could provide the Baltic region with some electricity that would otherwise come from Russia.

Russian economical answer

This is something Russia wants to avoid. It is no coincidence that Belarus’ nuclear plant would be located only 50 kilometers from Vilnius. The Belarusian plant is meant to complicate the Visaginas project by offering a nearby nuclear alternative. The Visaginas plant will have an estimated production capacity of 3,400 megawatts, while the Astraviec plant will have an estimated production capacity of 2,400 megawatts. Russia’s construction of yet another plant in Kaliningrad, which will have an estimated 2,340 megawatt production capacity, will provide yet another energy alternative to the region.

The future of the Visaginas project is unclear, but Russia’s motivations behind the Astraviec plant are quite clear: Moscow wants to preserve its primacy as an energy provider in the Baltics.