Warsaw/Vilnius - Poland and Lithuania established on Monday a joint venture responsible for plugging in three EU Baltic countries to the circuit of the rest of the European Union.

The CEOs of Lithuania's Lietuvos Energija and Poland's PSE Operator created in Warsaw LitPol Link company responsible for construction of an "energy bridge" between two countries.

It was a "historic project" that would provide the energy security for Poland, Lithuania and the other two Baltic States, Latvia and Estonia, said CEO of Lietuvos Energija, Rymantas Jouzajtis.

Warsaw and Vilnius have negotiated the integration of their energy grids for 18 years. Both countries want to reduce their dependence on energy supplies from Russia.

The 237-million-euro (367 million dollar) interconnection of the power grids involves a construction of 154 kilometre high-voltage double-circuit power transmission line from Alytus, Lithuania to Elk, Poland. The project requires building of 71 million euro worth of power lines in Poland and 166 million euro in Lithuania.

Both countries expect the EU grants will pay for the project.

Poland and Lithuania also plan to upgrade the existing power grids to make it possible for the cross-border electricity transmission. This will require additional investments of 371 million euros in Poland and 95 million euros in Lithuania paid for by the countries.

Estimates show the project can be finished by 2012-2015.

Lietuvos Energija and PSE Operator will each hold 50-percent interest in the joint venture.

The "energy bridge" is crucial for the new nuclear power plant that Poland and three Baltic States plan to build in Lithuania. The new nuclear power plant is to be completed by 2015.

Lithuania fears energy shortfall after closure of the Ignalina nuclear power plant at the end of 2009, that the EU wants to shut down for safety reason. The Soviet-built nuclear reactor is similar in its structure to the reactor in Chernobyl, Ukraine that suffered a meltdown in 1986. (dpa)