The Jamestown Foundation
Eurasia Daily Monitor
John C.K. Daly
May 16, 2008

On May 13 Lithuanian Prime Minister Gediminas Kirkilas met with Kazakh President Nursultan Nazarbayev and subsequently told reporters that Lithuania was seeking to deepen its energy cooperation and bilateral trade with Kazakhstan. Kirkilas told journalists, “We touched upon very important energy issues, because Lithuania is in need of alternative deliveries of gas and maybe oil” (Itar-Tass, May 13).

Kirkilas then touched on the real cause of Lithuania’s looming power shortage, the imminent closure of its aging Soviet-era Ignalina RBMK-1500 water-cooled graphite-moderated nuclear power plant, the world’s most powerful nuclear reactor, with a potential electrical power capacity of 1,500 MW.

Shutting down the plant was one of the conditions that Lithuania accepted when it joined the European Union in May 2004. Vilnius committed itself to mothballing Ignalina completely by December 31, 2009. Seven months after joining, Lithuania shut down Reactor One at Ignalina, leaving only Reactor Two operational. Lithuania and France are the two EU countries most dependent on nuclear power. Softening the blow somewhat, the EU agreed to pay Ignalina’s decommissioning costs and compensation for four years after the shutdown.

Lithuania remains heavily reliant on the nuclear power plant’s output, and last month Ignalina Reactor Two produced 948 MW, nearly 70 percent of the country’s electrical supply (Informacinis Biuletenis Nr. 153, In a bitter development for Lithuania, after 2009 Vilnius will be forced once again to turn to Russia in the short term for its electrical energy, as Lithuania’s national grid is wired to its massive eastern neighbor rather than its EU cohorts. The decision to close Ignalina has provoked strong opposition from the local population, as the plant was a major local employer.

In an optimistic leap of faith, Kirkilas and Nazarbayev also discussed Kazakh participation in constructing a LNG terminal in Klaipeda, which is Lithuania’s third largest city and largest seaport, a strictly commercial transaction, as Kazakhstan as yet has no LNG liquefaction and export facilities.

While the proposed cooperation may seem at first glance to benefit Lithuania the most, it has, in fact, substantial potential value for Kazakhstan as well. Given the previous tempestuous state of Russian-Lithuanian relations over Russian oil exports, it seems unlikely that Russia would allow Lithuania to use Transneft’s pipeline monopoly to import Kazakh oil. Lithuanian demands, however, could cause Kazakhstan further to consider shipping its oil via tanker across the Caspian to Baku, for transport by the Baku-Tbilisi-Ceyhan or Baku-Supsa pipelines, after which it could then transported to Lithuania either via sea or eastern European pipelines beyond Moscow’s control. Kazakh use of Baku for BTC or Baku-Supsa exports would help Astana diversify its options, and, as Kazakhstan would be transporting oil from its southern maritime border, there is little that Moscow could do.

In the long term, however, Lithuania continues to be interested in nuclear power, and a new nuclear power facility may well rise at Ignalina. Last year Lithuanian energy company representatives met with their Latvian, Estonian and Polish colleagues and Lithuanian politicians to discuss a feasibility study about constructing a new single-reactor 800 MW nuclear power plant, or a two-reactor 1,600-MW facility at the site. Such solidarity would not come cheap, as the proposed plant would require an investment of between $3.8 and $6.1 billion, with completion scheduled for 2015 (Baltic Times, January 4, 2007). Lithuania’s major problem in the short term is how to meet its electrical needs for the next seven years.

While Moscow may be willing to see a small fraction of Kazakh oil exports diverted over the next few years to Lithuania, it will doubtless pay far closer attention to other recent developments in Lithuanian-Kazakh relations, particularly the May 13 visit of Kazakh Defense Minister Daniyal Akhmetov to Vilnius. After meeting with Lithuanian Defense Minister Juozas Olekas, the pair signed an agreement to increase their countries’ cooperation in defense matters (BNS, May 13). In August Lithuania will accredit a defense attaché to Kazakhstan, who will be based in Astana but will also represent Kyrgyzstan. In turn, Lithuania will offer Kazakh officers billets at the General Jonas Zemaitis War Academy in Vilnius. Given Russia’s stout opposition to Georgia and Ukraine joining the alliance at the recent NATO summit in Bucharest, it hardly seems likely that this development will be met with approval in Moscow.

Lithuania is a member of NATO and Kazakhstan and Russia both joined NATO’s Partnership for Peace program in 1994. Unlike Russia and Kazakhstan, Lithuania is most assuredly not a member of the Shanghai Cooperation Organization. Whether on the shores of the Baltic or on the steppes, the officers will doubtless have interesting stories to share about their post-Soviet experiences with the Russian bear in the New Great Game. If the Lithuanians and the Kazakhs get too intimate in their budding relationship, Russia could turn off the lights or interrupt oil exports, for “technical reasons,” of course.
–John C. K. Daly