The Marshal Vasilevsky Factor: Energy Blockade of Kaliningrad Is Now Impossible

2019 started out with the most important event for Russia’s energy security. Russia’s first floating regasification unit was commissioned at the port of Kaliningrad. The Marshal Vasilevsky ship named after the Soviet military leader, who led the general staff and the Koenigsberg Offensive during the 1941-1945 Great Patriotic War, can transport and store liquefied natural gas and regasify LNG to supply consumers with household-grade methane in gaseous state.

It may appear that there is nothing unusual about this. Floating regasification units are used by many countries, and the Kaliningrad Region has access to piped natural gas, which Gazprom supplies through main trunk gas pipelines from the “mainland.” This is about the unique geographic location of the region and the geopolitical situation around it. The Kaliningrad Region is an exclave and has no direct connection by land with the rest of Russia. Kaliningrad’s territory borders only on Lithuania and Poland, which are, to put it mildly, not the most friendly states, and which have lately been among the main promoters of anti-Russia policy in Europe.

In terms of gas supply, the absence of direct transport links means using transit states. In this case, there are two: allied Belarus and not at all allied Lithuania. Even if there are occasional energy supply-related tensions with Minsk, the transit risk to the security of distribution to the Kaliningrad Region, with a million people and its strategic importance, was far from zero.

However, gas for this region is more than just 2.5 billion cubic meters of natural gas or 2.2 million tons of oil equivalent. It is almost the only source of energy for the region, as most of the electricity and heat are produced from natural gas that goes through Lithuania. A suspension in gas distribution – accidental or malicious – would be a major disaster, the consequences of which are difficult to predict. In 2013, Gazprom launched the Kaliningrad UGS, which is also unique to Russia, as it is located in salt caverns. Now, there are four tanks with an operating reserve of 174 million cubic meters. The peak gas supply in transit through Lithuania is about 10 million cubic meters per day. That is, at full capacity the storage facility would allow the region to hold out for just a little over two weeks. Expanding the UGS to 800 million cubic meters would make it possible to extend this period to almost 3 months. However, technically, the construction of salt caverns is a long and complicated process. Therefore, it will only reach full capacity in 2025.

Launching a floating regasification terminal will change things fundamentally. The capacity of its reservoir is 174,000 cubic meters of LNG. After regasification, it will convert to 100 million cubic meters of natural gas in the gaseous state. That adds 10 more days of emergency supplies to the region during the peak demand, which is quite enough for delivering another batch of LNG in case the emergency situation in the transit system is not eliminated or settled otherwise. Thus, the terminal can fully meet the needs of the region in natural gas and, thus, energy.

Will it be used routinely? Most likely, not. That makes no economic sense. LNG, even if produced locally, is several times more expensive than natural gas with regulated rates for Kaliningrad Region consumers. The building of the infrastructure (the receiving terminal and extending the gas pipeline network) cost about 44 billion rubles and represents an investment in energy security alone. The construction of the ship itself cost another $300 million. Under normal conditions, it can be used for the commercial transportation of LNG in the region and thus recoup its maintenance costs and the investment in construction. However, if something happens, the Marshal Vasilevsky will be able to promptly sail there and lift the energy blockade of Kaliningrad.

Views expressed are of individual Members and Contributors, rather than the Club's, unless explicitly stated otherwise.