Business

Russia and China seek foothold in Lithuania via gas and tech

Russia’s drive to maintain dominance in Baltic energy markets are among the key risks to Lithuania’s economic security, according to an intelligence report which also lists dubious investors in finance among potential threats.

Lithuanian intelligence bodies published the yearly National Threat Assessment report on February 4.

Belarus’ new nuclear power plant, to be launched in Astravets this year, presents a serious safety hazard next to the Lithuanian border, according to the State Security Department (VSD) and the Second Investigation Department under the Ministry of National Defence (AOTD).

The report details tensions between the facility’s builder, Rosatom, and Belarusian safety authorities.

“Rosatom prioritises on-time schedule over the security of the [Belarusian nuclear plant] BelNPP. At least since mid-2018, Belarusian authorities have been under pressure to allow the delivery of nuclear fuel, even though BelNPP’s facilities have not been properly prepared,” according to the document.

“Due to the rushed construction work, the negligent approach to nuclear safety, and the poor work ethics, numerous incidents in the BelNPP have occurred which could have a negative impact on its safe exploitation,” Lithuanian intelligence reports.

A fire caused by negligence in the plant’s Unit 1 last June was hushed up by the Belarusian authorities, says VSD head Darius Jauniškis.

“It was a major fire and it was hidden from the public and the international community,” he says. “If you hide such things, there is a reason.”

Lithuanian intelligence believes that the incidents and responsibility dodging led to the resignation of the plant’s construction manager Dmitriy Romaniec last July. “He quit and left Belarus in a very difficult period – at the start of major preparations for Unit 1.”

Russian energy companies

Russian energy companies were actively working to keep and strengthen their position in the Baltic states, according to the National Threat Assessment.

One of them, Novatek, sought to get a foothold in Lithuania’s liquefied natural gas (LNG) market supplying low-priced LNG via the terminal in Klaipėda.

“Although Novatek presents itself as a private and one of the most transparent companies in Russia, there is no doubt that its strategy and goals are coordinated with Russia’s top authorities,” the report claims.

Russia’s state-owned gas behemoth Gazprom “refrained from making direct influence” in 2019, but “sought to strengthen its activities through loyal intermediaries”. These are businesses “involved in gas trading schemes” in Lithuania and enjoying a competitive advantage through their links with Gazprom.

“The risk is that, after supplying a certain amount [of gas] and hooking us up on it, they can start dictating their terms,” VSD chief Jauniškis says.

The report also names Russia’s Inter RAO UES, an electricity trading company seeking to influence the synchronisation of the Baltic power systems with the Continental European Network. The company’s representatives also “tried to establish contacts with representatives of the EU institutions hoping to win their favour”, according to the document.

Dubious investors

In 2019, a growing number of investors from non-EU countries were interested in financial technology, payment, and electronic money companies in Lithuania, according to the report.

“It turned out that a significant number of third-country nationals seeking to invest in the financial and credit sectors were simply testing their capabilities and safeguards applied to foreign investments.”

Some of them immediately dropped their investment plans once they learned they were being screened by the authorities for potential national security risks.

Hazards of technology

A new potential risk factor in Lithuania, as in the rest of the world, is the emerging 5G technology, according to the National Threat Assessment.

“5G-enabled critical systems will become potential targets for cyber attacks [that] will be able to intercept information previously unavailable on the Internet and to disrupt newly created critical infrastructure.”

Another set of risks, according to the report, emanates from technology supply chain violations. “Evaluation of a provider should not only encompass potential links with well-known hackers, their groupings or hostile intelligence services, but also the assurance that it is able to ensure security of their products.”

While the report does not mention any particular manufacturers, VSD chief Jauniškis notes that Chinese companies are pushing for dominance in 5G technology.

Remigijus Baltrėnas, the chief of AOTD, notes that risks associated with China’s biggest technology manufacturer Huawei remain unchanged from the previous year.

“Let me remind you that, in 2019, we recommended to exclude risky companies like Huawei from sectors of special importance and infrastructure,” Baltrėnas says. “This risk remains unchanged.”

This article was first published at LRT and is reproduced here with permission.