Poland signs deal to pipe gas to Russia-dependent Baltic states

Poland on Thursday signed a landmark deal to build the first EU gas pipeline to the isolated Baltic countries, reducing their uneasy reliance on Russian supplies.

"You have witnessed history being made," European Commission President Jean-Claude Juncker said after the signing of the 558-million-euro ($636 million) deal between Poland, Lithuania, Latvia and Estonia.

"You have ended the energy isolation of the Baltics. You have ended their long-lasting dependence on a single supplier," Juncker said.

The pipeline of more than 500 kilometres (300 miles) from Poland to Lithuania is the first between the two countries, and the first between the eastern Baltic Sea region and continental Europe, the Commission said.

The European Union is providing financing of 300 million euros, officials said.

The Baltic states, once run from Moscow as Cold War-era satellites, joined the EU in 2004 and now see the bloc as offering a more secure future, especially after Russia's intervention in Ukraine.

The three however remain heavily dependent on Russia for energy supplies, stoking fears they were too exposed to a newly assertive Moscow which has not been slow to play the gas card in its stand-off with Kiev.

"We know how harmful effects can be if member states play off against each other or if we are divided by states outside of the EU," Polish Prime Minister Ewa Kopacz told reporters.

Kopacz was also quoted by the Polish embassy to the EU as saying, in reference to Russia, that the "abusive gas policy ... will no longer be possible".

- More projects ahead -

In April, the three Baltic leaders urged Poland and the EU to speed up work on the gas pipeline.

Construction is set to begin next year on the GIPL (Gas Interconnection Poland-Lithuania) pipeline and have an initial annual capacity of 2.4 billion cubic metres, according to Commission figures.

Preparatory work began in 2009.

Anastasios Giamouridis, senior consultant for Poyry Management Consulting in Oxford, England, told AFP the deal will benefit not only Lithuania but also Latvia and Estonia, "which for the moment are still characterised by a high degree of dependency on Russian supply".

He said the next step will be to provide more access to storage and transmission lines "so that the benefits of these diversified gas supply options for Lithuania can be shared more fully with both Latvia and Estonia".

Kopacz on Monday opened a maritime liquefied natural gas (LNG) terminal on the Baltic coast to ensure Warsaw's energy independence from Russia.

The 720-million-euro ($820-million) investment in the northwestern city of Swinoujscie comes at a time when Poland has also built hundreds of kilometres of pipelines and underground gas reservoirs.

The country of 38 million people currently depends on its own resources for a third of the gas it consumes, importing 40 percent from Russia and 20 percent from Central Asia.

The first liquefied gas tanker will arrive from Qatar -- the world's largest LNG producer -- around mid-December.

Source: AFP