KN: Lithuania’s decision on long-term import of LNG opens new opportunities for regional leadership

The Seimas of the Republic of Lithuania decision on the assurance of the long-term import of the liquefied natural gas to Lithuania is the beginning of the new stage in the history of the national energy, which opens new opportunities for the regional leadership. KN (AB “Klaipėda nafta”), the operator of oil products and liquefied natural gas (LNG) terminals, while initiating the preparation for the implementation of the state decisions delegated to it, emphasises that one of the key issues of the nearest future is the assurance of a sustainable financial model and the funds for the implementation of this decision and the harmonisation of the financial model with the European Commission, KN says in a press release.
 
“We see that the LNG terminal, on the one hand, offers for Lithuania new possibilities in the regional and the international context, since, being a sample project, it attracts other states encouraging us to share experience and knowledge. On the other hand, after the four-years operation duration of the terminal, we can confidently state that we see the potential to increase the value chain in the whole Baltic Sea Region. Our aim is to use all possibilities offered by the Klaipėda terminal to the full extent thus creating the greater value to the state and the residents as possible,” Mindaugas Jusius, CEO of KN, claims. 
 
According to Mr. Jusius, the existing vessel-terminal rent agreement is valid until 2024. Before that time KN must find the best and economically most efficient decision regarding the acquisition of a concrete storage vessel. It is estimated that for the implementation of this decision KN will probably need additional funding amounting to EUR 300 million. For that purpose, additional bank financing will be searched for, and other fund attraction possibilities will be assessed. The company is also planning to contribute with its own funds.
 
“The state decision regarding the assurance of the long-term supply of LNG to the state provides KN will legal grounds to take further actions, to launch negotiations with potential project financiers. We have many significant decisions ahead regarding further directions of the company’s activities, our operative model, etc.,” Mindaugas Jusius says, and highlights that the coming year will be very intensive, since a specific plan of actions will be drafted.
 
The company has already launched the preparation process. On 1 December, a separate Klaipėda LNG service was established. It will deal with the reduction of Klaipėda terminal costs, export of LNG to third countries, as well as with other issues related to the terminal activities and bunkering.
 
According to KN calculations, since the launch of the operation of the LNG terminal in Klaipėda in 2014, the amount of funds saved by Lithuanian residents due to decreasing prices on gas reached EUR 103 million. Klaipėda LNG terminal is among the most efficiently operating LNG terminals in Europe. It supplies about half of the total amount of the natural gas consumed in Lithuania.