Maintenanceof Klaipėda LNG terminal will cost even less

On the 30th of December the National Energy Regulatory Council (hereinafter - the NERC) has lowered a natural gas security component by 38.55%, effective from 01 January 2020. Lowering of the security component, when compared to the current security component, will save natural gas consumers 36.1 million euros per year.

The decision was passed by the NERC after KN, the operator of oil and liquefied natural gas (hereinafter - the LNG) terminals, received a 134 million euro loan from the Nordic Investment Bank to finance part of the cost of the LNG storage facility lease.

On 30th December 2019 NERC approved the fixed component of the LNG regasification price of 194.31 Eur/(MWh/day/year) excluding VAT. Compared to 2019, this price is twice as low (in 2019 it was 390.42 Eur/(MWh/day/year)).

Arūnas Molis, the Head of KN Klaipėda LNG office, emphasizes that the decision, advantageous for all Lithuanian gas consumers, was the result of the increased use of the terminal, which allowed to implement the first stage of the assurance of the long-term operation of Klaipėda LNG terminal, i.e. To distribute long-term payments for the terminal more evenly.

“Another important decision affecting sustainability has been passed, it consolidated the long-term competitiveness of LNG and promotes the use of natural gas as a clean fuel in Lithuania. In this context, we are also contributing to the implementation of the recently announced European Green Agreement, which provides for an important role for the LNG. In terms of economic benefits, most time it was more advantageous to Lithuanian and Estonian state-owned and private companies to import by large LNG vessels from Norway or the USA, or even by  small LNG vessels from Vysotsk than through pipelines, both in terms of gas prices and charges of infrastructure. The first step in the implementation of the long-term LNG supply project should provide the market with even more certainty about the future of the terminal, and stable volumes of LNG regasification will create preconditions for further reduction of the security component for Lithuanian gas consumers,” emphasizes Arūnas Molis.

In 2019, 51 LNG vessel arrived at Klaipėda LNG terminal, and brought 3 million cubic meters of LNG, and 19.36TWh of gas was re-gasified. That’s more than twice the re-gasification rates of 2018 and corresponds to approximately 85% of Lithuanian annual natural gas consumption. The majority of natural gas (81.2%) supplied through the Klaipėda LNG terminal this year was shipped from a natural gas liquefaction plant in Norway, and at the end of the year one of the largest LNG cargoes arrived to Lithuania from the USA.