June 21, 2012 / 4:25 PM / in 7 years

Lithuania parliament approves nuclear deal

* Lithuania parliament backs agreement aimed at new nuclear plant

* Prime minister likely to face electoral challenge

* Centre-right government aims to decrease dependency on Russia

VILNIUS, June 21 (Reuters) - Lithuania’s parliament on Thursday backed government plans to work towards a final deal to build a new nuclear power plant by 2020-2022, a victory for the centre-right prime minister but a decision that could be overturned after an election this year.

Prime Minister Andrius Kubilius has been a driving force in efforts to cut the Baltic state’s energy dependence on ex-Soviet master Russia. But an election is due in October and he is running behind in the polls.

Nevertheless, he hailed the parliament vote to work towards a final construction deal with U.S.-Japanese alliance Hitachi-GE Nuclear Energy for a 1,350 MW ABWR reactor.

“I am happy a very important historic decision allowing the further development of nuclear energy in Lithuania ... has been made,” Kubilius told reporters at parliament, which backed the concession deal with 74 out of the 141 seats in the house.

But the main opposition Social Democrat Party, which leads opinion polls ahead of the election, boycotted the vote in protest at the cost of the project, estimated by the Finance Ministry at up to 6.8 billion euros ($8.64 billion).

Lithuania wants Baltic neighbours Latvia and Estonia, to share the cost together with Hitachi as a strategic investor.

Having now won parliament’s approval, the government is to continue talks with regional partners, and Hitachi, on setting up a project company and signing a shareholders agreement.

A final investment decision is expected in 2015, it added.

In 2011, Lithuania imported 65 percent of its electricity, making it the European Union member which is the most dependent on power imports, most of which came from Russia. ($1 = 0.7873 euros) (Writing by Nerijus Adomaitis; Editing by Jon Hemming)

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