New Lithuania govt reconsiders nuclear project, backs LNG

Thu Dec 13, 2012 12:30pm EST

Related Topics

* Hitachi-GE venture was to supply reactor

* Seeks LNG to wean off from Russian gas

OSLO Dec 13 (Reuters) - Lithuania's new centre-left government said it would reconsider a project to build a new nuclear power plant but continue to support a liquefied natural gas (LNG) import terminal.

The centre-right government, which lost elections in October, had signed a preliminary deal to build a new nuclear power plant by 2020, but 63 percent of voters said "no" to the project in a non-binding referendum.

Lithuania must weigh costs and benefits of all options to meet its electricity needs, including plans for nuclear energy, the new government said in a programme approved by the parliament on Thursday.

"The (choice) of the best alternative should be based on cost and benefit analysis and to assure energy independence and the best price," it said.

The new government is led by Social Democrats who had previously criticised the project as too expensive for one of the poorest member states of the European Union.

Japanese-U.S. joint venture Hitachi-GE Nuclear Energy was lined up to supply the 1,350 megawatt (MW) capacity ABWR reactor.

Lithuania's finance ministry has estimated the total cost of building a new plant at 6.8 billion euros, with 4 billion euros expected to come from loans.

LNG TERMINAL

The new government, meanwhile, has backed plans of the previous cabinet to build an LNG import terminal by end-2014 to reduce dependence on its sole natural gas supplier, Russia's Gazprom.

New Lithuanian Prime Minister Algirdas Butkevicius said on Thursday he had assured the banks involved in the financing of the terminal that the project would not be suspended, the Baltic news agency BNS said.

"I said very clearly that we will not suspend any tenders (for the terminal), and the things that have been launched already shall be implemented," BNS quoted Butkevicius as saying.

Lithuania's majority state-owned oil company, Klaipedos Nafta, has signed a 10-year contract with Norway's Hoegh LNG to charter a floating gas storage and regasification vessel (FSRU).

The project is estimated to cost up to 604 million litas ($228.11 million) in infrastructure developments and 430 million euros ($560.72 million) for a 10-year charter of the FSRU, a business plan approved by the previous government showed.

Klaipedos Nafta is looking to funding for the terminal from commercial banks as well as the Nordic Investment Bank (NIB) and the European Bank for Reconstruction and Development (EBRD).

The government's programme also included earlier plans to build a gas pipeline to neighbouring Poland, which aims to produce a significant volume of shale gas.

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