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Lithuania to supply LNG to a 750 MW power plant in Poland - minister

VILNIUS, Jan 21 (Reuters) - A gas-fired power station planned for northeast Poland will use liquefied natural gas (LNG) imported via a terminal in Lithuania, in a sign of the region’s growing independence from Russian gas.

The Ostroleka plant was originally planned to run on coal, but the project was suspended because of financing and environmental issues.

State-run Polish oil company PKN Orlen, which took on the project in a merger deal, said it would only invest in the plant if it ran on gas.

“According to the plans, the power plant will be purchasing its gas via the Klaipeda terminal. This will use a third of its capacities,” Lithuanian Energy Minister Dainius Kreivys told a parliamentary committee meeting, which was broadcast on YouTube.

Klaipedos Nafta, which operates the import facility, declined to comment.

Lithuania and Poland will be joined by a gas pipeline by the end of 2021.

Russia’s Gazprom lost a third of its share of the Finnish gas market in 2020 after a new pipeline made it possible to import LNG from the Lithuanian facility at Klaipeda port, which has a capacity of 3.7 million cubic meters of gas per year, or about 74 LNG ships.

Poland has taken steps to reduce its reliance on Russian gas and ensure its main gas company, PGNiG, has stable deliveries beyond 2022.

The group is buying more LNG via Poland’s terminal in Swinoujscie on the Baltic Sea and in 2021 expects to receive 31 LNG deliveries, based on contracts and purchases on the spot market.

In December, PKN signed agreements with PGNiG to cooperate on building the 750 megawatt gas power facility by the end of 2024. PGNiG is taking a 49% stake in the project.

PKN also agreed to take gas deliveries from PGNiG through 2027, including to the Ostroleka plant.

Polish coal mining trade unions threatened to strike in September, demanding the government change its energy policy, including using coal, not gas, at the Ostroleka plant.

Reporting by Andrius Sytas. Editing by Mark Potter

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