Today, 1 October, the new gas year of the liquefied natural gas (LNG) terminal operated by KN (AB Klaipėdos nafta) begins, which is welcomed by the terminal with extremely high operating results: during the last year of natural gas (until 30 September), the largest amount of natural gas was regasified and supplied to the Lithuanian natural gas system to date – 23.9 TWh, when, compared to last year, it amounted to 14 TWh.
 
“The amount of regasification is a significant indicator, which is a record this year and means that the LNG terminal, which once abolished the status of Lithuania as an energy island, in its sixth year of operation fully serves as a regional infrastructure for third parties. In other words, terminal customers can deliver LNG from anywhere and at market prices. In this way, natural gas consumers are able to pay the market price for gas as well. Without an LNG terminal as an alternative to pipeline gas from Russia, this would not be possible. Our calculations show that during the gas year 2020, more than 70% of the total amount of natural gas consumption was supplied from the LNG terminal to Lithuanian natural gas consumers“, Darius Šilenskis, CEO of KN, emphasizes the role of the LNG terminal in the Lithuanian energy system. 
 
According to him, the customers of the LNG terminal (5 companies) took advantage of the favorable situation in the LNG market this year, when the European natural gas storage facilities became full due to the demand shock caused by the COVID-19 virus and the warmer-than-usual winter, which also led to a decrease in LNG prices.

“As the Klaipeda LNG terminal operates on the basis of third party access and commercial clients can use it’s services, its use directly correlates with the price of LNG in global markets, just like other terminals, for example, Zeebrugge in Belgium, Gate in the Netherlands and others. Global prices have little effect on those terminals where supply options are limited by consumption or long-term alternative contracts, for example, Świnoujście,” explains D. Šilenskis.

During the last year of natural gas, even 74 loading operations were performed at the LNG terminal, that is the number of gas carriers who visited the LNG terminal, which is more than twice as much as in the 2019 natural gas year, when 33 gas carriers arrived. Total of 3.5 million cubic meters of LNG were delivered during 2020 gas year, compared with 2.2 million cubic meters in the natural gas comparison in 2019 gas year.
 
“The increase in the number of gas carriers (+ 124%) was determined by the commercial decisions of LNG terminal users and for the truly competitive prices. As many as four LNG shipments came from the U.S. in the 2020 natural gas year. We are waiting for another cargo from the U.S. at the start line of the new natural gas year – it will be delivered next week. This shows that the gas liquefaction and LNG logistics infrastructure being developed in the U.S. increases the competitiveness and liquidity of LNG as an energy source. This is certainly beneficial for countries with LNG import and regasification infrastructure. It is gratifying that Lithuania has been on the list of such countries for six years“, the Head of KN comments.
 
D. Šilenskis points out that the beginning of the gas year is also positive – this year and during the preliminary LNG terminal capacity allocation procedure, significantly more LNG terminal capacity was reserved for the gas year starting on 1 October – even 8.4 TWh.
 
According to the Head of KN, this year is impressive not only in terms of the volume of operations of the great LNG terminal, but also a significant breakthrough in the use of LNG is being felt: “The customer of the LNG reloading station became the Polish PGNiG, the vessel bunkering operations in the port of Klaipėda has started, LNG as an alternative fuel also found itself in the perspective of the State. EUR 2.34 million of support has been provided from the DNA Plan of the Future Economy for the installation of LNG filling points, the Alternative Fuels Act is being considered, which provides guidelines in favor of the use of LNG, and additional support is also provided in the Climate Change Program. All this shows that the emergence of LNG infrastructure six years ago has enabled us to achieve an independent, more sustainable and more climate-neutral economy. Reflecting the emissions of gas and comparing them with the emissions of conventional, popular fuels and energy production, LNG and natural gas are clearly key energy sources for a climate-neutral economy by 2050.“
 
The natural gas year runs from 1 October to 30 September.
 

Klaipedos nafta, AB, (hereinafter - the Seller) hereby informs about the announcement of sales auction (hereinafter - the Auction) of dark petroleum product, KN code 27101967 (hereinafter – DPP or the Product). The Auction shall be performed in accordance with the Rules of auctioning of the oil products in bulk of Klaipėdos nafta, AB, (hereinafter - the Rules), confirmed by the Seller and publicly announced on the Seller’s website www.kn.lt.

Main information about the Product and conditions of its sale:

1. The total Product quantity for sale – 3 893,056 kg. The Participant must bid for the whole quantity of the Product announced for sale (the quantity of Product is not sold in parts).
2. The quality of the Product is determined in the Terminal shore tank of the Seller (see ref. to the Quality Certificates enclosed).
3. The Product will be sold for the highest price offered in US dollars for 1 (one) metric gross ton in vacuum. Delivery conditions FOB and/or FCA port of Klaipeda, Seller’s terminal.
4. The price for such 1 (one) metric ton of the Product shall be equal to the average of the mean quotations for 1.0 pct Fuel Oil, published by Platt’s European Marketscan under the heading „FOB Rotterdam“, quotation code PUAAP00, during the period from 1^st till 30^th of September, 2020 (both dates inclusive). In the submitted proposal the Participant shall indicate the acceptable deviation in US dollars per metric ton in vacuum as of the price.
5. The Buyer has the right to propose to the Seller alternative Product pricing period. In any case, after receiving proposals the Seller reserves the right to decide on the best Products final selling price.
6. The Winner of the Auction undertakes to transport entire accumulated Product from the Seller’s Terminal within 30 (thirty) calendar days after signing the sales-purchase agreement (hereinafter - the Agreement) or on other term agreed by the parties, but not later, than within 90 (ninety) calendar days.
7. No later than the expiry of the proposals for Auction registration term the Participant shall pay to the Seller's account the Obligation Fee.

The Obligation Fee – 15 000,00 (fifteen thousand) USD.
The Seller’s bank details:
Luminor Bank AB
SWIFT: AGBLLT2X
IBAN: LT962140030003089309

8. No later than the expiry of the proposals for Auction registration term the Participant shall provide the filled out Proposal for Auction, which template is attached to this Notice, copies of the company registration certificates or other establishing documents and representation documents (power of attorney) as required by the Rules. In addition, together with submitted documents, The Participant shall submit the document proving the payment of the Obligation Fee.
9. No later than the expiry of the proposals for Auction registration term the Participant the Participant may take a sample of the Product and complete the additional test at his own costs.
10. The Provisional invoice shall be paid by the Buyer not later than 2 (two) working days prior to first day of the LAYCAN for nominated tanker or not later than the first day of tank-truck loading operations. The provisional invoice shall be issued by the Seller not later than 5 (five) days prior to first day of the LAYCAN or no later than 5 (five) days prior to first day of tank truck loading operations. The Provisional price of one metric of the Product shall be equal to the average of the mean quotations for 1.0 pct Fuel Oil, published by Platt’s European Marketscan under the heading „FOB Rotterdam“, quotation code PUAAP00, published a day (the last known publishing day) before Provisional invoice issuance, minus/added [___________]  US dollars per metric ton in vacuum.
11.  Within 5 (five) business days after loading the last metric ton of the Product into the transport (tanker or tank-truck) provided by the Buyer, the Seller shall issue an invoice and submit it to the Buyer by e-mail address [___________]. Within 3 (three) working days the Buyer is obliged to cover the delta amount of the Product values indicated in the provisional invoice and invoice. The Obligation fee and sum paid by the provisional invoice shall be deducted from the payable amount indicated in the invoice. In such a case, that the amount paid by the Buyer according to the provisional invoice is higher than amount indicated in the invoice, the Seller is obliged to cover the delta amount within 3 (three) working days after the final Product price is calculated. Actual payment date shall be the date of funds crediting to the Seller's bank account.
12.  The process and schedule of the Auction

Date	Action
September 10, 2020	Invitation to submit proposals – The Notice regarding the Auction.
September 24, 2020	Deadline for Participants to submit proposal for the Auction.
till September 29, 2020	The Auction committee evaluates submitted proposals in a closed meeting and announces the Winner of the Auction.*
till September 30, 2020	Signing the Agreement with the Winner of the Auction
No later than within 30 (thirty) calendar days after signing the Agreement or on other term agreed by the parties, but not later than within 90 (ninety) calendar days	The Winner of the Auction transports the Product from the Seller‘s Terminal.

* The Auction Committee has the right to discuss and decide arranging the second round of negotiations following the procedure defined in the Rules.

13.  The proposals together with documents indicated in this Notice/Announcement shall be submitted in accordance with the procedure set forth by the Rules, to the Authorized person of the Seller – the senior manager of commercial operation, Sabina Digrienė, by e-mail commerce@kn.lt not later than on 24^th of September, 2020, at 4.30 PM Lithuanian time.
14.  The conditions and procedures for proposals submission, evaluation, announcement of the winner, contract conclusion and all other sales terms are regulated by the Rules and the main conditions of the Product sales-purchase agreement.

Enclosed:

1. The Rules of auctioning of the oil products in bulk of Klaipėdos Nafta, AB
2. Main conditions of the sales and purchase agreement (General Terms and Conditions for the Provision of Services at Klaipėdos Nafta AB; Annex No. 1 Terms and Conditions for Product Issuance/Loading to Trucks at Klaipėdos Nafta AB)
3. Quality Certificates of the Product
4. Proposal template

KN (AB Klaipėdos nafta) has announced the tender for the construction contractor of its new administrative building in Klaipėda this week. The winner of the contract work for the building located at Burių st., Melnragė is expected to be selected by the end of this year and will start construction next year.
 
The winner of the tender will have to build a five-story building of around 2.400 sq. m. area, replacing the gym located at Burių st., which was built in 1993, in order to install a parking lot fitting almost 100 cars. Offers may be submitted until the end of October.
 
The company Eksploit which won the tender has prepared the project for a future KN administrative building worth 175 thousand euros. The project was publically presented in June this year. 
The main accent of the project is the volumetric expression of the building, which will replicate the cylindrical oil product tanks located nearby. In order to blend the natural and industrial environment, the building is divided by the facade of a system of vertical blinds.

Up to 140 people will be able to work in the circular-shaped five-story building.

KN employees currently work in two offices in Klaipėda. One of these offices is located at Burių st., Melnragė, next to the Klaipėda Oil Terminal operated by the company, the other is located in administrative premises rented by KN in the administrative building of the Central Klaipėda Terminal.  Once the new building has been constructed, all employees working in Klaipėda will have the opportunity to work together under one roof, while the old premises will probably be adapted for industrial activities.

The construction of the administrative building has been extensively discussed and planned.

“We considered all possible alternatives before making this decision, including the renewal of current KN buildings at Burių st. and possible involvement of the developer who would construct the building and rent it to the company. After evaluating all circumstances, economic efficiency and operational requirements in the port area, the optimal solution was chosen – the construction of administrative building in KN territory, by involving a general construction contractor,” says Darius Šilenskis, Chief Executive Officer.

According to the CEO of KN, the amount of investment in the new administrative building has been estimated after a thorough market study, but is not yet disclosed.
“We do not reveal how much the construction of the building could cost so far, as by announcing this tender we expect to receive the most economically advantageous offer and the highest possible participation of tenderers. We will be able to provide more information about the price after choosing the construction contractor,” says D. Šilenskis.
 

The second LNG shipment for PGNiG, a partner oil and gas company in Poland, will arrive at the KN (SC Klaipėdos Nafta) Liquefied Natural Gas (LNG) reloading station at the port of Klaipėda tomorrow, August 26. Darius Šilenskis, the General Manager of KN, says that the LNG distribution reloading station has had a breakthrough year for providing combined LNG services.
 
The shipment for PGNiG, which contains approximately 3.2 thousand m³ of LNG, is being delivered by an LNG bunkering vessel Coralius to the port of Klaipėda for the first time. This ship was built in 2017 and carries the Swedish flag. It is one of the three LNG bunkering vessels serving LNG terminals and completing bunkering operations in the Baltic and Scandinavian markets.
 
KN, the operator of oil and LNG terminals, has entered into a five-year strategic partnership agreement with the Polish oil and gas company PGNiG in November last year and in April 2020 PGNiG started its operations in Klaipėda.
 
“Our activities in Lithuania in the use of the local LNG reloading station are gaining momentum, and the cooperation with Klaipėdos Nafta is excellent. In less than five months, we received two LNG loads, and over 100 tank trucks loaded with liquefied natural gas have already left the station. It is over 1,800 tons of LNG, which equals over 27,000 MWh” - said Jerzy Kwieciński, President of the PGNiG Management Board.
 
“Our strategic decision to establish cooperation with PGNiG brings tangible results to the development of the activities at the LNG reloading station. The Polish LNG consumption market is already sufficiently broad and involves the use of LNG in the transport sector as well as the supply of LNG to customers who are distant from the natural gas network. On the other hand, as owners of an infrastructure in the port of Klaipėda, we receive enquiries from various companies in the marine sector regarding the possibility of bunkering LNG-powered vessels or replenishing the capacity of LNG-powered trucks. There is still a lot of work to be done in this area, in terms of adjusting port shipping rules and port charges, as well as promoting LNG infrastructural development projects at public level in order to motivate the market," said Darius Šilenskis, CEO of KN.
 
According to D. Šilenskis, bunkering of the LNG-powered cement-shipping vessel Greenland has become a regular operation in the port of Klaipėda this year. The ship is bunkered in Malkų Įlankos Terminalas by supplying LNG in an ISO container, which is filled at the LNG reloading station. Since the first bunkering operation of this kind in March this year, ten further LNG transshipments have been carried out.
 
“LNG bunkering of ships is becoming a common practice in the port of Klaipėda. We hope to attract other types of ships powered by LNG, such as container ships, oil tankers or cruise ships to fuel up with LNG at the reloading station in Klaipėda or, as in the case of the cement-shipping vessel Greenland, elsewhere in the port of Klaipėda. It must be understood that users are only drawn to such a service if it is competitive in all aspects: the price of the service must be attractive, and the conditions of entering and staying at the port must also be favorable," notes D. Šilenskis.