Lithuania passes laws to secure energy supplies

(VILNIUS) - Lithuania passed two laws Tuesday to secure future energy supplies by building a gas terminal in the Baltic Sea and linking its Soviet-era power grid to Western European networks by 2020.

The country of three million people, heavily dependent on Russian energy supplies, has singled out its connection to the European system as its priority.

The liquefied natural gas (LNG) terminal, which will allow the 2004 EU entrant to diversify its sources, is due to launch operations by December 2014 providing at least 25 percent of the country's gas demand.

Lithuania now depends on a single supplier -- Russia's Gazprom -- for its gas supplies, a heritage of 50 years of Soviet rule that ended in 1991.

Vilnius and Gazprom have been haggling over gas prices, and the Russian giant has also seen Lithuania's efforts to promote an EU-wide gas market reform as a threat to its interests.

Norwegian company Hoegh LNG has been tasked with building the offshore terminal.

Under a ten-year contract, Lithuania's Klaipedos Nafta controlled by the state with a 71-percent stake will have the right to buy the terminal and manage it on its own.

Lithuania's connection to the western European power network is due to start in early 2015 as its grid will be connected to the Polish and Swedish networks, with the project to be completed in 2020.

At the end of June, Lithuanian lawmakers are scheduled to vote on another energy project -- the construction of a new nuclear power station in Visaginas in the north of the country, approved recently by the European Commission.