Will LNG be able to ensure energy security in the Kaliningrad region?
The Kaliningrad region has always had a unique special status due to its geographical location. This region is completely separated from the main part of Russia by the borders of foreign countries. In recent years, the Russian authorities have been actively involved in ensuring the energy security of the Kaliningrad region. Thus, for these purposes, in 2019, a gas receiving terminal and a floating regasification unit “Marshal Vasilevsky” were put into operation, which will be discussed further.
Until 2019, the Kaliningrad region received natural gas in industrial quantities only through the Minsk-Vilnius-Kaunas-Kaliningrad transit gas pipeline, built during the Soviet Union, with a throughput capacity of 2,5 billion cubic meters per year. The transit of fuel through the territory of Belarus has never threatened the energy security of the Kaliningrad region, if we talk about it with political point of view, which cannot be said about Lithuania, which has made attempts to escape gas dependence on Russia by reorienting itself to the markets of other countries. That is why it was decided to implement a project for an alternative gas supply option to the Kaliningrad region. Thus, already at the very beginning of 2019, Gazprom put into operation a liquefied natural gas (LNG) terminal and a floating regasification unit “Marshal Vasilevsky”, which made it possible to bring the region’s energy security to a new level.
It is worth noting that “Marshal Vasilevsky” is the only floating regasification unit in the Russian Federation that specializes in the storage, transportation and regasification (conversion of gas from liquefied to gaseous state) of LNG. The vessel was launched in 2019, initially it was engaged in the export transportation of fuel to various countries (Spain, India and others). However, already in 2022, due to the worsening political situation, it was assigned to the Kaliningrad direction in case of a stop in Lithuanian transit. The capacity of the cargo tanks of this installation is 174 thousand cubic meters.
Another facility that appeared within the framework of this project was a gas receiving terminal, which was built in the Baltic Sea, five kilometers from the coast. Its main structural element can be considered a stationary sea pier with a breakwater. It is in this place that the floating regasification unit “Marshal Vasilevsky” is moored. The length of the pier, installed on 177 piles, is 125,5 meters, it is protected from waves by a powerful breakwater 728 meters long. This design guarantees the safe operation of the vessel and is capable of functioning in the most severe storms, which occur quite often in this region. The regasification process takes place on the vessel itself, after which the fuel is sent to the region’s gas transportation system. The gas is then supplied to consumers or pumped into the Kaliningrad underground gas storage facility (UGS). This method makes it possible for the region to receive natural gas by sea transport in the amount of up to 3,7 billion cubic meters per year, which completely covers the needs of the region.
It is also necessary to clarify that the Kaliningradskoye UGS facility itself was put into operation back in 2013 and became the first underground facility of this type in the Russian Federation, which was built in rock salt deposits. Its appearance made it possible to level out seasonal unevenness in gas consumption and maintain flexibility and regularity of supplies of “blue fuel” to end consumers in the region. In addition, the underground gas storage facility is a significant component of the project to ensure energy security of the Kaliningrad region. Currently, its technical capabilities continue to increase; it is expected that by 2025 the facility will reach its design capacity. Despite such optimistic forecasts, quite recently the governor of the Kaliningrad region, Anton Alikhanov, stated that the construction of underground gas storage facilities is proceeding two times slower than was envisaged in the original plans.
I would like to explain why the 2025 target is so important in this case. It is reported that the agreement between the Russian Federation and Lithuania on fuel transit is valid until 2025. If Lithuania is able to secure the required number of LNG contracts, then the extension of this contract may become completely unnecessary for Vilnius, which will lead to a complete stop in gas transit to the Kaliningrad region along this route. In 2022, a similar situation already occurred, then Lithuania stopped passing goods subject to EU sanctions that were transported in transit by rail from the regions of the Russian Federation to the Kaliningrad region.
Previously, the Ministry of Energy of the Russian Federation stated that the regasification terminal will be a backup source of supply and the commissioned facility will not be used at full capacity on a regular basis. The reason, according to officials, was high fuel prices. Taking into account everyone economic conditions, liquefied natural gas was an order of magnitude more expensive than pipeline fuel. Moreover, this is due not only to the technological process, which requires serious additional financial costs, but also to the fact that Gazprom purchases most of the LNG from foreign traders, which also leads to an increase in its price. Around the same time, Russian President Vladimir Putin asked the government to prepare proposals that would make it possible to ensure that the difference in price between pipeline gas and LNG would not place an additional burden on the shoulders of ordinary consumers in the Kaliningrad region.
To summarize, I would like to add that in the changed economic conditions, the importance of this project has seriously increased. Pipeline gas supplies to the Kaliningrad region could be threatened at any time due to Lithuania's political positions. In such a situation, liquefied natural gas may remain one of the few types of fuel that will guarantee the energy security of the region. To do this, it is necessary to more actively develop the capacity of underground gas storage in the region, so that in the event of negative developments, it will be possible to form the reserves of “blue fuel” necessary for the region.
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