Lithuanian LNG and oil terminal operator AB Klaipedos Nafta (KN) has signed a EUR 134.1 million (USD 148 million) loan with the Nordic Investment Bank (NIB) to finance the rent payable for the Floating Storage and Regasification Unit (FSRU) Independence.
The FSRU used for LNG import to Lithuania is chartered from Norwegian Höegh LNG on a ten-year arrangement that expires in 2024. The LNG terminal was inaugurated in 2014 with the aim of diversifying natural gas supply.
KN Board has expressed interest to acquire LNG storage unit Independence or another floating liquefied natural gas storage unit by 2024 and optimize current costs of the LNG terminal infrastructure.
“Through this loan agreement we are continuing to support Lithuania´s security of energy supply, a strategically important objective for our member country,” says Henrik Normann, NIB President & CEO.
The Lithuanian energy company said that NIB’s funding will cover around EUR 26.8 million of the payments each year during the period 2020–2024, providing an opportunity to reduce the cost of LNG terminal infrastructure for consumers. As explained, the 25-year maturity loan would enable equalized tariff levels to be maintained throughout the full lifetime of the terminal, both before and after an FSRU is acquired.
“International energy experts confirm that the use of natural gas and LNG as the cleanest fossil fuel for power generation and heavy-duty road transport will play an important role in the transition for the EU to become a climate-neutral economy by 2050. Therefore, it is important for us to find the most cost-effective and sustainable solutions to the reduction of the security supplement of gas supply to ensure the competitiveness of LNG over other forms of energy and fuels,” says Darius Šilenskis, KN CEO.
As of the beginning of 2019, the LNG terminal has carried out 57 LNG loading and reloading operations, and the regasification rate for January-November 2019 is more than double the amount for January-November of 2018, with a total of 17.4 TWh of gas re-gasified by the end of November, KN said.
According to Arūnas Molis, the director of KN Klaipėda LNG office, the terminal has handled more loading operations than over the last four years combined and attracted two users of the terminal from Estonia- Eesti Energia and Elenger.