Lithuania's first floating LNG terminal breaks Russian monopoly

People wave national flags as they welcome the first liquefied natural gas (LNG) terminal "Independence" in the port of Klaipeda, Lithuania. -- PHOTO: AFP
People wave national flags as they welcome the first liquefied natural gas (LNG) terminal "Independence" in the port of Klaipeda, Lithuania. -- PHOTO: AFP

KLAIPEDA, Lithuania (AFP) - The "Independence", a huge floating liquefied natural gas (LNG) terminal docked in the Lithuanian port of Klaipeda on Monday, becoming the first such facility to sever Moscow's energy grip on the Baltic states.

Several hundred onlookers waving Lithuanian flags and an honour guard welcomed the massive white-and-blue vessel measuring three football fields in length, an AFP photographer said.

Lithuania, despite joining the EU and NATO in 2004, has been completely dependent upon Russia for natural gas, a legacy of five decades of Soviet domination which wound down in 1990.

The terminal gives Lithuania, with a population of three million, the capability to import up to four billion cubic metres of gas per year after 2015 from sources such as Norway's Statoil.

This is well above the 2.7 billion cubic metres it bought from Russia last year, and leaves plenty of extra capacity for its Baltic neighbours Latvia or Estonia, analysts note.

Lithuania will use the terminal to import 0.54 billion cubic metres of gas from Statoil next year, about one-fifth of annual demand, the first alternative to Russian energy giant Gazprom.

The EU's energy chief described the arrival, broadcast live on the national TV, as "an important milestone by Lithuania to diversify its gas supply sources, ensure competitive gas prices and security of gas supply" in the region.

"The challenges that Europe faces today in terms of security of gas supply require a quick response, and Lithuania has shown how this can be delivered," Guenther Oettinger, the EU's energy commissioner, said in a statement.

Lithuania, which declared independence in 1990 after five decades of Kremlin rule, has repeatedly locked horns with Russian energy company Gazprom, accusing it of abusing its market clout to impose unfair pricing. Gazprom has denied the claims.

Baltic neighbours Latvia and Estonia, which are totally dependent on Russian gas, said they were also considering to use the terminal for LNG imports in the future.