Energy 5 August, 2019 10:00 am   
COMMENTS: Mateusz Gibała

Vaičiūnas: Harmony Link is safe (INTERVIEW)

Lithuanian Minister of Energy Žygimantas Vaičiūnas talks about reception of the polluted oil crisis in his country and preparations for synchronization with the European electricity system by Poland through Harmony Link. How has the problem of polluted oil been perceived in Lithuania?

Žygimantas Vaičiūnas: There was no significant direct impact on our oil sector, because Orlen Lietuva focuses on petroleum products. There was no direct impact on this company. We imported oil only through the oil terminal. Deliveries by Druzba have not been possible since 2006, when the pipeline supplies were discontinued and this had a political context, because that’s when Orlen took over the Mažeikiai refinery.

Does Lithuania experience other problems with Russian oil? The Russians argue that they will abandon deliveries by your ports.

This is the sphere of speculation. We have relations with Belarusian companies. We are talking about oil supplies to Belarus via Lithuanian ports. Supply tests from various directions are under way.

How is the diversification of oil supplies to Lithuania going?

Like Poland, we are diversifying thanks to the work of Orlen Lietuva. The Mažeikiai refinery has more and more contracts with, for example, Saudi Aramco and other suppliers from outside Russia. The portfolio is changing now.

Will there new infrastructure be a needed?

We have sufficient infrastructure, but PKN Orlen wants to increase the efficiency of oil processing in Mažeikiai. The same amount of oil will be able to provide more petroleum products. We support and congratulate these activities.

In the Lithuanian and Polish press, speculations appeared on the possible problems of Harmony Link, a power interconnection with Poland, which would synchronize the Baltic countries with the European system. Is there such a risk?

Network operators in both countries have taken specific steps and cooperation is excellent. We see progress. A feasibility study is underway. The sides intend to submit an application for co-financing from the Connecting Europe Facility. Co-financing can reach up to 75 percent. In 2020 a final investment decision is to be made. It is very important that in June, a political agreement on the implementation of the synchronization has been fixed specific dates of implementation of Harmony Link. In addition, we have good experience of Lithuania and Poland dealing with potential problems, as in the case of NordBalt. The Lithuanian authorities had to intervene in the matter of the Russian fleet exercise, but after a few days the problem of blocking the construction was solved. It is worth remembering that Nord Stream 2 will have to cross NordBalt, so we do not anticipate problems when crossing Harmony Link with Russian infrastructure. This is not a significant obstacle to the project, but we must take all precautionary measures and measures to manage potential threats.

Can this technical matter come across political activities?

The task of our operators will be to prepare the best route for this connection and the best conditions for building a connection, so that the project can be completed without delays or problems.

Is it certain that synchronization will be finished in 2025?

In the last two years, we have moved from political arrangements to real work in the synchronization project and have achieved an irreversible project stage. The objectives of the political agreement signed in June 2018 by the leaders of Poland, the Baltic States and the European Commission have been successfully achieved and we have moved to the practical stage of the synchronization project, ensuring maximum EU funding in the first phase of synchronization. Another important event took place a month ago – the agreement signed in Brussels will ensure that the project will continue to be supervised and coordinated at the highest political and technical level, ensuring that all sides will carry out all the necessary work at a specified and agreed time to ensure reliable Baltic and European operations power networks on one frequency until 2025.

All this is a good example of cooperation between politicians, operators and other key players when compromises and necessary solutions can be found, sometimes very difficult to achieve a common strategic goal. I would like to point out that the role of Poland in the synchronization agreement was crucial and will continue to be so.

What will happen with the gas directive, which in the course of implementation in the member countries – according to some analysts – may be deprived of provisions aimed at subordinating Nord Stream 2 to European law?

It is important that the amendments to the gas directive have been approved and the key role of the European Commission will be maintained. All arrangements must be approved by the Commission before and after the talks. We must trust that the Commission will adequately oversee the implementation of the Directive with regard to Nord Stream 2.

Interview by Wojciech Jakóbik