Lithuanian and Polish gas transmission system operators (TSOs) AB Amber Grid and GAZ-SYSTEM S.A. have signed a grid Connection Agreement on Thursday to invest into Gas Interconnection Poland-Lithuania (GIPL) thus starting a construction stage of the project.

 

‘Following intense and productive negotiations we are now entering a phase of the implementation of the project. GIPL grid is one of the most important projects in the country’ energy sector as it paves the way to integrate the gas transmission systems of Lithuania as well as the Baltic States into the common European gas market. It also secures another alternative gas supply source, economic benefit and security of energy supply to all partners involved. Moreover, the new interconnection with Poland, our strategic partner, creates new possibilities for the operation of LNG terminal and option for even more competitive gas prices in our market’, says Žygimantas Vaičiūnas, Lithuanian Minister of Energy.

 

‘GIPL project is a perfect example of European solidarity and joint, targeted and active efforts of parties involved. The project brought to life will offer the users of Baltic States and Finland a bigger choice of natural gas supply and prices, also opening new perspectives for natural gas market participants’, says Saulius Bilys, CEO of Amber Grid.

 

After signing this agreement international tenders will be announced for contractors and purchase of pipes. March 2019 is provisioned as a date to start pipeline construction works in the territory of Lithuania, after international procurement tenders are over.

 

GIPL pipeline is planned to be completed and put into operation in December 2021. The approximate projected length of the pipeline is around 500 km, while 165 km running in the territory of Lithuania.

 

When the pipeline is constructed, new capacities will be created allowing to transport gas up to 27 TWh a year to Baltic States and up to 22 TWh a year to Poland, making the gas market of Baltic States a part of common EU gas market.

More on GIPL project

GIPL project is run by Lithuanian gas TSO AB Amber Grid and Polish gas TSO GAZ-SYSTEM S. A.

GIPL project is important for reaching the implementation of the aims of EU energy policy, related to the diversity of natural gas supply, ensuring of security and stimulating competitiveness in the gas market. GIPL project aims to integrate gas markets of Baltic States and Finland into a common EU market, to create an access to the new gas supply sources and ways, to increase the competitiveness of gas market in Lithuania and neighbouring EU countries, to increase the security, reliability and flexibility of gas supply in BEMIP region as well as to create possibilities to aim the mechanisms of solidarity in the possible extreme situation.

On 13 May 2015 AB Amber Grid and GAZ-SYSTEM S.A. signed a trilateral agreement with the European Union's (EU) Innovation Network Executive Agency (INEA) on the financial assistance of the EU to the Project "Preparatory Works for the Poland-Lithuania Gas Interconnection up to building permission(s) obtainment". Under this Agreement, the Project was granted financial assistance of the EU up to EUR 10.2 million under the Connecting Europe Facility (CEF). Amber Grid's part accounts up to EUR 2.51 million.

On 15 October 2015 AB Amber Grid and GAZ-SYSTEM S.A. signed a trilateral agreement with the EU Innovation Network Executive Agency (INEA) on the financial assistance of the EU to the Project “Construction of Gas Interconnection Poland-Lithuania (GIPL) including supporting infrastructure”. Under this Agreement, the Project was granted financial assistance of the EU up to EUR 266.4 million under the Connecting Europe Facility (CEF). Amber Grid's part accounts up to EUR 57.9 million.

Following the decision by ACER (as of 11 August, 2014) regarding the solution for the cross-border cost allocation, the part of the construction works of the GIPL project will be co-financed by Lithuania, Latvia and Estonia, which will cover part of the infrastructure costs in Poland accordingly.

On May 11 2018 Amber Grid, GAZ-SYSTEM, Conexus Baltic Grid (Latvia) and Elering (Estonia) concluded a cost-allocation agreement that set out procedures and principles required for the implementation of the European Agency for the Cooperation of Energy Regulators (ACER) decision on the Gas Interconnection Poland-Lithuania (GIPL) project cross-border cost allocation. This agreement has assured GIPL financing for Polish part.

The GIPL project has been included in the list of projects of common interest of the European Union, the ten-year development plan of the European Network of Transmission System Operators for Gas (ENTSOG), the Baltic Region’s Transmission System Operators Gas Regional Investment Plan (BEMIP).