July 6, 2007 / 12:35 PM / 11 years ago

UPDATE 2-Baltic, Polish firms to negotiate nuclear plant

(Adds environmentalists’ concerns paras 11, 12)

By Nerijus Adomaitis

VILNIUS, July 6 (Reuters) - The Baltic states and Poland failed on Friday to sign a formal agreement to proceed with a joint $9 billion nuclear power plant in Lithuania and instead charged their energy companies to negotiate a shareholder deal.

The plant will replace Lithuania’s ageing Ignalina facility, which has to be shut for safety reasons under a deal with the European Union, and is seen as a key instrument in helping the participating countries reduce their reliance on Russian gas.

A meeting of prime ministers in Vilnius had been expected to rubber stamp a deal, but Poland’s Jaroslaw Kaczynski failed to attend. Organisers said this was for domestic political reasons.

Poland, with Latvia and Estonia, has disagreed with a law passed by Lithuania’s parliament, under which Vilnius is to have 34 percent of the project and other partners 22 percent each.

“We agreed to start negotiations between our energy companies to prepare a shareholder agreement,” Estonian Prime Minister Andrus Ansip told a news conference in Vilnius.

“Poland confirmed it will take part in the project,” his Lithuanian counterpart Gediminas Kirkilas added.

The talks will focus on how the plant is run, shareholdings and on the size of the reactor, prime ministers said.

AB Lietuvos energija, Latvia’s AS Latvenergo, Estonian Eesti Energia and Poland’s Polskie Sieci Elektroenergetyczne SA will be the participants in the talks.

“We have decided that all the details need to be worked out at the level of the companies,” a Lithuanian official said.

Ignalina currently operates the same kind of reactor as caused the 1986 Chernobyl nuclear disaster.

Environmentalists said they were glad a final deal to build a new nuclear plant had not been signed and they criticised the governments for failing to consider renewable energy sources.

“The new Baltic nuclear power plant has no economic or environmental justification,” the Green movements of Poland, Latvia, Lithuania and Estonia said in a joint statement.

The new nuclear plant is expected to be built by 2015 and generate around 3,200 megawatts of power, decreasing dependency on power from fossil fuel and on energy from Russia.

NOT A RUSSIAN REACTOR

“We prefer European, North American or Japanese, but not a Russian producer to supply the reactors,” Estonia’s Ansip told Reuters. A decision on the type of reactor to be used will have to be taken by consensus, he added.

Firms including French state-owned nuclear group Areva CEPi.PA and U.S. General Electric (GE.N) have stated their interest in supplying the reactors for the new plant.

A Lithuanian government source said the proposed shareholdings in the project could change in the process of negotiations, although the Lithuanian share would not.

Ansip and Latvian Prime Minister Aigars Kalvitis said they were now more concerned with how much power they would get from the project than with the shareholdings. Ansip said Estonia wanted to cover 25-30 percent of its energy needs and reduce the need to buy carbon dioxide emissions allowances in future.

Kirkilas said the new nuclear power plant should provide a better energy price for consumers in all countries involved.

“It is a question of energy independence. Nobody knows what the price of electricity will be if we will have to use more gas,” he added. All three Baltic states rely on gas from Russia. (Additional reporting by Patrick Lannin in Riga)

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