EU to decide by end of year on Lithuania LNG plant loan-official
* EU checking Lithuania loan for LNG plant
* Lithuania wants terminal to reduce Russian domination
VILNIUS Oct 3 (Reuters) - The European Commission expects to rule on the legality of Lithuanian state guarantees for a loan to build a liquefied natural gas (LNG) terminal by end of this year, the EU executive said on Thursday.
The terminal is an important project for the Baltic state, which wants to end its dependence on gas from Russia, of which it remains suspicious after decades of Soviet domination.
The European Investment Bank (EIB) agreed to grant a 87 million euro loan in July after the company in charge of the project, Klaipedos Nafta, failed to raise funds from commercial banks.
"We are advancing a state aid case regarding financing the LNG terminal in the Klaipeda seaport ... I hope we can conclude this decision by the end of the year," European Union Competition Commissioner Joaquin Almunia told journalists.
"We are assessing whether the investment is compatible from the point of view of state-aid control," he added.
The loan will only be released if the Commission approves the guarantees, a spokeswoman for the Energy Ministry said.
Klaipedos Nafta has said the 20-year loan from the EIB will cover as much as 50 percent of infrastructure investment costs estimated at 600 million litas ($236.7 million).
It still needs to raise 100-150 million litas. The company has agreed to lease for 10 years a floating storage and regasification unit (FSRU) from Norway's Hoegh LNG.
The FSRU, which will serve as a floating import terminal, could supply up to 2 billion cubic metres (bcm) of natural gas from 2015, though no contracts to deliver LNG to the terminal have been signed yet.
Lithuania imported 3.3 bcm of gas from Russia last year, and Gazprom was the sole supplier. ($1 = 2.5345 Lithuanian litas) (Reporting by Andrius Sytas,; writing by Nerijus Adomaitis, editing by Patrick Lannin)
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