Lithuanian natural gas transmission system operator Amber Grid has signed a €79.85 million ($88.5 million) construction works deal with a consortium consisting Alvora and Šiaulių dujotiekio statyba for the GIPL gas interconnection between Poland and Lithuania.
Under the agreement, works on the project are scheduled to be started as soon as January, Amber Grid said in its statement.
LMR Drilling has been hired for the complex works of directional drilling, while Elsis will perform the control system works.
At the end of 2021, when the gas pipeline connecting Lithuania and the West is put into operation, Lithuania together with the Baltic States will become part of a huge European gas market.
After the Balticconnector gas pipeline connecting Estonia and Finland starts operating as of 2020, the GIPL interconnection will enable the consumers in the Baltic States and Finland to buy and sell gas on a competitive basis for the best price, and even more efficiently use the capacity of the LNG terminal by transporting gas through the new North-South corridor.
This gas pipeline will establish Lithuania’s freedom of energy choice to an even higher extent and reduce the dominating power of the Eastern supplier. After a new source is opened, a lower gas price prevailing in the West will also reflect in the Baltic market.
The first contract of GIPL project for the manufacture and purchase of steel pipes required for gas pipeline connection was signed on the 25th of July. Amber Grid signed the contract with the value of €26.4 million with the Polish company Izostal which is the successful tenderer of the international public tendering procedure.
The contractor will begin the works in January from the starting point of the GIPL gas pipeline which is situated in Širvintos district, adjacent to Jauniūnai Compressor Station. I
n two years, 165 km long underground gas pipeline will be constructed from Širvintos to the Lithuanian-Polish border in Lazdijai district, also a border gas metering station will be equipped.
In Poland, the pipeline will extend over a distance of more than 340 kilometers.
At the beginning of September, Polish gas transmission system operator Gaz-System, which is the partner of the GIPL connection, launched the public tendering procedure for the contract works of part of the pipeline in the Polish territory. The company has also secured for itself pipe supply contracts.
The total value of the GIPL project is around €500 million, investment on the Lithuanian side will amount up to €112 million. More than 60 percent of the project funding was allocated by the European Commission.
Latvian and Estonian gas transmission system operators will also contribute to the funding of the project.
Construction of the GIPL gas pipeline is planned to be completed and the connection is expected to be operational at the end of 2021.
The newly constructed gas pipeline connection will create capacity for transporting up to 27 terawatt-hours (TWh) of natural gas per year in the direction of the Baltic States, and up to 21 TWh per year in the direction of Poland, and the Baltic gas markets will become part of the single EU gas market.
Amber Grid implements the EU project of common interest Gas interconnection Poland–Lithuania (GIPL) along with Polish gas transmission system operator Gaz-System.