Natural Gas Transmission System Operator
Agreement Defines GIPL Cost Allocation

Transmission System Operators of the Baltic States and Poland have signed an agreement on the Gas Interconnection Poland Lithuania project cross-border cost allocation.

The multilateral inter-operator cost-allocation agreement sets 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.

The agreement concluded among Amber Grid, Conexus Baltic Grid (Latvia), Elering (Estonia) and Gaz-System (Poland), also lays down a method for the calculation and adjustment of compensations to be paid by that Baltic gas transmission system operators (TSOs) to the Polish TSO as well as provisions for possible return of any such compensations in case the Polish TSO pipeline should generate extra income from its effective gas transmission business through the GIPL.

The agreement between the Baltic States and Poland on the GIPL project cost allocation paves the way for Amber Grid’s conclusion of a gas pipeline interconnection agreement with its partner in this project, GAZ-SYSTEM. It is planned to announce public tenders for the procurement of contract works and piping after signing this agreement.

On 13 May 2015, AB Amber Grid and GAZ-SYSTEM S.A. signed (and in January of 2017 amended) a trilateral agreement with the EU Innovation and Networks Executive Agency (INEA) on the EU financial support for the project “Preparatory works for the Gas Interconnection Poland-Lithuania up to the building permission(s) obtainment". According to this agreement, the project allocations amount to up to EUR 10.2 million of EU support funds under the Connecting Europe Facility (CEF). Allocations for Amber Grid amounted to EUR 2.51 million.

On 15 October 2015, AB Amber Grid and GAZ-SYSTEM S.A. signed (and in January of 2017 amended) a trilateral agreement with the EU Innovation and Networks Executive Agency (INEA) on the EU financial support for the project action ’Construction of the Gas Interconnection Poland-Lithuania (GIPL) including supporting infrastructure‘. The agreement provided for the allocation for this project of up to EUR 266.4 million of EU support funds under the Connecting Europe Facility (CEF). Out of this total, allocations for Amber Grid amounted to up to EUR 57.9 million.

In accordance with the ACER decision as of 11 August 2014 on the cross-border project cost allocation, in addition to the EU financial support, the GIPL construction project will be financed by Lithuania, Latvia and Estonia, thus covering part of the GIPL infrastructure costs in the territory of Poland.

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).

The project is also included in the National Electricity and Natural Gas Transmission Infrastructure Priority Projects Implementation Plan as approved by the Republic of Lithuania Government decision and the Natural Gas Transmission System Operator’s ten-year network development plan (2016-2025).

 

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