The pipeline would integrate the Baltic States into the European Union’s gas market, and would provide access to the global LNG market via the Swinoujuscie LNG terminal.

The business case analysis shows that construction of the Gas Interconnection Poland – Lithuania (GIPL) would result in strong benefits for the regional gas markets in terms of security of supply and market opportunities.

According to preliminary estimates, the GIPL would be 562 km long. The pipeline would have the capacity to transport 2.3 Bcm/a of natural gas to the Baltic states; with additional moderate investment, the pipeline’s capacity could be increased to 4.5 Bcm/a of gas. Construction costs are estimated to be approximately $US621.6 million, with 73 per cent of investment to be based in Poland.

The business case analysis of the GIPL was performed by Ernst and Young Business Advisory on the basis of a trilateral agreement with AB Lietuvos Dujos and Gaz-System, the respective gas transmission operators of Lithuania and Poland.

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The two operators’ management bodies have now decided they will proceed with the next stage of the project: preparation of the pipeline feasibility study.

The tender for the feasibility study will be announced in the coming weeks, and should be completed in the fourth quarter of 2012.