1. Energy Security of Lithuania and Impact of Nord Stream Project dr.Tomas Janeliūnas The Institute of International Relations and Political Science

2. Priorities of Lithuania’s Energy Security  Ensuring reliable energy supply and functionality of energy infrastructure;  Diversification of energy supply sources;  Reduction of dependence on energy resource import (by reducing energy intensity and switching to alternative or renewable energy recourses).

3. Energy Dependence from Russia - lessons learned  Energy blockade from Russia/Soviet Union in 1990  Disruption of gas supply in 2004  Stopped supplying of oil by Druzba pipeline since July 2006

4. Oil supply and refining in Lithuania

5. Importance of Butinge oil terminal  Butinge terminal was considered to be the main instrument for prevention of energy blockade  The terminal became an important element of oil export system and provided an opportunity for Lithuania to become an oil transit country  Currently Lithuania has physical capability to import oil by see and in this way Mazeikiu oil refinery can still function profitably

6. Oil loading in Butinge terminal 2001-2005 200120022003200420052006 Oil loaded (mln.t.) 5.16.110.77.26.15.9

7. Oil sector – the main conclusion The development of oil sector in Lithuania has proved one simple principle – mediation in energy sector (that is - participation in transit and process of refining) strengthens energy security and economically is more useful than being just a consumer

8. Dependence in gas sector  Gazprom is the only gas supplier to Lithuania.  Natural gas is transported to Lithuania via the only Minsk-Vilnius- Kaliningrad, pipeline, which is controlled by “Gazprom”.  Gazprom is one of the biggest stockholders of the main Lithuanian gas operator “Lietuvos dujos”. (Gazprom” has 37%, his main partner in Western Europe “E.ON Ruhrgas International AG” share 39%, and 18% is left for Lithuanian government).  There are no gas storage facilities in Lithuania.  Lithuania does not have capabilities to deliver, recast or store big quantity of liquid natural gas (LNG).

9. Lithuania’s reaction to the Nord Stream project  Dissolved hopes about possibility to become a gas transit country  Fears about increasing pressure of Gazprom on gas price  Evoked clash between the CEE and Western European countries.

10. Possible gas pipelines from Russia to Europe Yamal 1 Yamal 2 Amber NEGP

11. Impact of the Nord Stream project for Lithuania’s energy security  The Nord Stream, compared to more favourable “Amber” pipeline, will increase Lithuania’s energy insecurity.  Lithuania will remain just a gas consumer, state budget will not get extra money from gas transit.

12. Impact of the Nord Stream project for Lithuania’s energy security (2)  The Nord Stream project (among other recent Russia’s moves) contributed to become energy security one of the main topics in the global and EU agenda.  Baltic and Central European countries have got a chance to strengthen regional cooperation in the energy sector; The Nord Stream project gives to Baltic states and Poland a new impulse for solving the energy security problems by common efforts

13. Future of Lithuania’s Energy Security  The main structural changes in Lithuania’s energy security sector could take place only if EU consolidates its Common Energy Policy.  More intense consolidation of interest may take place rather in Baltic and CEE countries. Two-way movement of energy security policy may emerge in EU  Lithuania need to take a very proactive position in its EU policy to ensure the security interest in energy sector.