News
2019-11-29
KN will cooperate with strategic partners to develop small-scale LNG market
On Friday, oil and LNG terminal operator KN entered into a strategic partnership agreement with Polish Oil and Gas Company PGNiG, for which LNG reloading station capacity has been reserved for five years. PGNiG will start commercial operation of the LNG reloading station from April 2020.
KN invited global and regional LNG companies that have LNG trading portfolios and / or LNG transport capacities and are interested in the development of the LNG market in the Baltic region and Poland to participate in the capacity allocation reservation tender. The final decision has been made based on the tender with the best price. According to Darius Šilenskis, KN CEO, the signed agreement allows KN to secure a steady revenue stream.
“KN will continue focusing on the flawless operations of LNG and oil terminals as well as development on the range of services provided for our customers. This is the main reason why for the purposes of developing the regional market, we decided to look for strong partners who would be interested in developing commercial activities with our infrastructure and would be actively engaged in the development of the LNG market. We are delighted with the partnership with PGNiG and believe that our synergies will contribute to strengthening the regional prospects,” says Darius Šilenskis, CEO of KN.
According to D. Šilenskis, the development of LNG as a significantly more environmentally sustainable energy source is also important in our region, given the intensified energy diversification in the. world in recent years and the need to search for less polluting energy and fuels in the context of global warming.
KN reloading station, located near the gate of Klaipėda port, officially opened in October 2017. It consists of five tanks for liquefied natural gas, each with a capacity of 1,000 cubic metres. Up to two LNG tankers and a small volume LNG vessel can be filled at the same time at the LNG reloading station. Upon the commissioning of the KN LNG reloading station, together with the opportunities provided by the LNG terminal in Klaipėda, KN became one of the first companies in the world, providing all integrated LNG logistics services, thus consolidating the full value chain in the region.
“This agreement broadens the horizons of strategic cooperation between Lithuania and Poland in the energy sector. We have an example of very practical and valuable cooperation rather than theoretical. This is good news for the region and for natural gas consumers, as it means further development of the LNG market, increased access to LNG for off-grid customers, and more competitive prices” says Minister of Energy Žygimantas Vaičiūnas.
During the two years of operation about 12 companies from Lithuania, Estonia and Poland used the LNG reloading station for filling of their tankers. 44,000 cubic metres of LNG have been delivered to the KN LNG reloading station since beginning of its operations, with 6 different small scale LNG vessels have delivered LNG during this period.
“KN appreciated our experience in operations and sales of small-scale LNG from the President Lech Kaczyński Terminal in Świnoujście and from our LNG facilities in Odolanów and Grodzisk Wielkopolski. PGNiG will also gain better access to the small-scale LNG market in the Baltic countries and increase the competitiveness of its offer for customers from the area of north-eastern Poland and Central and Eastern Europe due to the use of the onshore LNG reloading station in Lithuania. It is very important from the point of view of security of supply that PGNiG will independently decide from whom to buy and bring LNG to the onshore reloading station in Lithuania,” commented Piotr Woźniak, President of PGNiG Management Board.
Polish Oil and Gas Company PGNiG deals with exploration and production of natural gas and crude oil and – through its branches and key companies from the Capital Group – with import, storage, sales, distribution of gaseous and liquid fuels, production of heat and electricity as well as geophysical and drilling services. Its subsidiaries and branches carry out exploration and production activities in Norway and Pakistan, gas sales in Germany and LNG trading through an office in London.
KN invited global and regional LNG companies that have LNG trading portfolios and / or LNG transport capacities and are interested in the development of the LNG market in the Baltic region and Poland to participate in the capacity allocation reservation tender. The final decision has been made based on the tender with the best price. According to Darius Šilenskis, KN CEO, the signed agreement allows KN to secure a steady revenue stream.
“KN will continue focusing on the flawless operations of LNG and oil terminals as well as development on the range of services provided for our customers. This is the main reason why for the purposes of developing the regional market, we decided to look for strong partners who would be interested in developing commercial activities with our infrastructure and would be actively engaged in the development of the LNG market. We are delighted with the partnership with PGNiG and believe that our synergies will contribute to strengthening the regional prospects,” says Darius Šilenskis, CEO of KN.
According to D. Šilenskis, the development of LNG as a significantly more environmentally sustainable energy source is also important in our region, given the intensified energy diversification in the. world in recent years and the need to search for less polluting energy and fuels in the context of global warming.
KN reloading station, located near the gate of Klaipėda port, officially opened in October 2017. It consists of five tanks for liquefied natural gas, each with a capacity of 1,000 cubic metres. Up to two LNG tankers and a small volume LNG vessel can be filled at the same time at the LNG reloading station. Upon the commissioning of the KN LNG reloading station, together with the opportunities provided by the LNG terminal in Klaipėda, KN became one of the first companies in the world, providing all integrated LNG logistics services, thus consolidating the full value chain in the region.
“This agreement broadens the horizons of strategic cooperation between Lithuania and Poland in the energy sector. We have an example of very practical and valuable cooperation rather than theoretical. This is good news for the region and for natural gas consumers, as it means further development of the LNG market, increased access to LNG for off-grid customers, and more competitive prices” says Minister of Energy Žygimantas Vaičiūnas.
During the two years of operation about 12 companies from Lithuania, Estonia and Poland used the LNG reloading station for filling of their tankers. 44,000 cubic metres of LNG have been delivered to the KN LNG reloading station since beginning of its operations, with 6 different small scale LNG vessels have delivered LNG during this period.
“KN appreciated our experience in operations and sales of small-scale LNG from the President Lech Kaczyński Terminal in Świnoujście and from our LNG facilities in Odolanów and Grodzisk Wielkopolski. PGNiG will also gain better access to the small-scale LNG market in the Baltic countries and increase the competitiveness of its offer for customers from the area of north-eastern Poland and Central and Eastern Europe due to the use of the onshore LNG reloading station in Lithuania. It is very important from the point of view of security of supply that PGNiG will independently decide from whom to buy and bring LNG to the onshore reloading station in Lithuania,” commented Piotr Woźniak, President of PGNiG Management Board.
Polish Oil and Gas Company PGNiG deals with exploration and production of natural gas and crude oil and – through its branches and key companies from the Capital Group – with import, storage, sales, distribution of gaseous and liquid fuels, production of heat and electricity as well as geophysical and drilling services. Its subsidiaries and branches carry out exploration and production activities in Norway and Pakistan, gas sales in Germany and LNG trading through an office in London.
2019-11-15
Tariffs for LNG services provided by KN were approved for 2020
The National Energy Regulatory Council (NERC) has approved new tariffs for LNG services provided by KN for 2020, which allow to reduce the security component for consumers. Based on the new re-gasification price of 0.35 €/MWh set for 2020, the company plans to collect more revenue directly from the terminal users. The amount of revenue paid by all terminal users will reduce the security component paid by Lithuanian natural gas consumers.
16 TWh of gas have been re-gasified through Klaipėda LNG terminal from the start of 2019 till now. According to KN calculations, if in 2020 Lithuanian and regional consumers would be supplied with the similar amount of gas re-gasified at LNG terminal, it would reduce the security component paid by all natural gas users by approximately 5.6 million euros (calculations based on the newly set tariff).
“The competitiveness of LNG in the Baltic gas market promotes regional utilisation of the LNG terminal, and increasing cross-border gas flows significantly contribute to the lowering of the terminal costs for gas consumers in Lithuania. In October alone, we re-gasified a record 2.7 TWh of gas, which is the absolute highest amount re-gasified per month in the terminal's history. Each terminal user who utilises the services of the terminal pays for the re-gasification services, so high re-gasification volumes are anticipated and will contribute to the lower security component paid by Lithuanian gas consumers next year”, says Arūnas Molis, the Director of KN Klaipėda LNG office.
In the light of the decisions passed by the Board of KN to secure long-term LNG import, KN has proposed to the NERC to significantly reduce the security component related to infrastructure costs, subject to the conclusion of a loan agreement with NIB and if a State guarantee would be granted for this loan. The implementation of this proposal would allow to reduce the costs of LNG terminal infrastructure by 27 million euros per year since 2020.
16 TWh of gas have been re-gasified through Klaipėda LNG terminal from the start of 2019 till now. According to KN calculations, if in 2020 Lithuanian and regional consumers would be supplied with the similar amount of gas re-gasified at LNG terminal, it would reduce the security component paid by all natural gas users by approximately 5.6 million euros (calculations based on the newly set tariff).
“The competitiveness of LNG in the Baltic gas market promotes regional utilisation of the LNG terminal, and increasing cross-border gas flows significantly contribute to the lowering of the terminal costs for gas consumers in Lithuania. In October alone, we re-gasified a record 2.7 TWh of gas, which is the absolute highest amount re-gasified per month in the terminal's history. Each terminal user who utilises the services of the terminal pays for the re-gasification services, so high re-gasification volumes are anticipated and will contribute to the lower security component paid by Lithuanian gas consumers next year”, says Arūnas Molis, the Director of KN Klaipėda LNG office.
In the light of the decisions passed by the Board of KN to secure long-term LNG import, KN has proposed to the NERC to significantly reduce the security component related to infrastructure costs, subject to the conclusion of a loan agreement with NIB and if a State guarantee would be granted for this loan. The implementation of this proposal would allow to reduce the costs of LNG terminal infrastructure by 27 million euros per year since 2020.
2019-11-18
The notice of KN regarding auction of oil products in bulk
Klaipedos nafta, AB, (hereinafter - the Seller) hereby informs about the announcement of sales auction (hereinafter - the Auction) of fuel oil surplus, KN code 27101968 (hereinafter - 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:
The Seller’s bank details:
AB SEB Bankas,
Gedimino ave. 12, Vilnius
Bank code: 70440
BIC: CBVILT2X
IBAN: LT90 7044 0600 0076 4196
Intermediary Bank:
DEUTSCHE Bank Frankfurt am Main
SWIFT: DEUT DE FF
* The Auction Committee has the right to discuss and decide arranging the second round of negotiations following the procedure defined in the Rules.
Main information about the Product and conditions of its sale:
- The total Product quantity for sale – 1 936 mt. The Participant must bid for the whole quantity of the Product announced for sale (the quantity of Product is not sold in parts).
- The quality of the Product is determined in the Terminal shore tank of the Seller (see ref. to the Quality Certificates enclosed).
- The Product will be sold for the highest price offered in US dollars for 1 (one) metric gross ton in vacuum. Delivery conditions (according to Incoterms 2010) FOB port of Klaipeda, Seller’s terminal.
- The price for such 1 (one) metric ton of the Product shall be equal to the average of the mean quotations for 3.5 pct Fuel Oil, published by Platt’s European Marketscan under the heading „FOB Rotterdam“, quotation code PUABC00, during the period from 1st till 30th of November, 2019 (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.
- The Buyer has the right to propose to the Seller alternative Product pricing structure and final selling price. In any case, after receiving proposals the Seller reserves the right to decide on the best Products final selling price.
- 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).
- 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 Seller’s bank details:
AB SEB Bankas,
Gedimino ave. 12, Vilnius
Bank code: 70440
BIC: CBVILT2X
IBAN: LT90 7044 0600 0076 4196
Intermediary Bank:
DEUTSCHE Bank Frankfurt am Main
SWIFT: DEUT DE FF
- 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.
- The provisional invoice shall be issued by the Seller not later than 5 (five) days prior to first day of the LAYCAN. 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. The Provisional price of one metric of the Product shall be equal to the average of the mean quotations for 3.5 pct Fuel Oil, published by Platt’s European Marketscan under the heading „FOB Rotterdam“, quotation code PUABC00, published a day (the last known publishing day) before Provisional invoice issuance, minus/added [___________] US dollars per metric ton in vacuum.
- 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, if such was paid while participating in the Auction, 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.
- The process and schedule of the Auction
Date | Action |
November 18, 2019 | Invitation to submit proposals – The Notice regarding the Auction. |
November 22, 2019 | Deadline for Participants to submit proposal for the Auction. |
till November 27, 2019 | The Auction committee evaluates submitted proposals in a closed meeting and announces the Winner of the Auction.* |
till December 2, 2019 | Signing the Agreement with the Winner of the Auction |
No later than within 30 (thirty) days after signing the Agreement | The Winner of the Auction transports the Product from the Seller‘s Terminal. |
- 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 22nd of November, 2019, at 4.30 PM Lithuanian time.
- 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.
2019-11-07
Darius Šilenskis appointed as KN CEO
The Board of KN (AB “Klaipėdos nafta”), the Oil and LNG Terminal Operator, appointed Darius Šilenskis as the new CEO of the Company. Until now, D. Šilenskis held the position of director of KN Oil business.
“KN has prepared new business strategy, which establishes number of ambitious goals for the company for the next ten years. When making a decision regarding the most suitable candidate for the position of CEO of KN, in depth understanding and knowledge of energy sector and energy business field, competence of business development, experience of working with international clients, orientation towards result as well as potential to unite the teams toward them, are important. According to the Board members, D. Šilenskis is the best candidate to meet these requirements and expectations”, - says Giedrius Dusevičius, Chairman of the Board.
The selection procedure of the new CEO was carried out by Independent Board of KN in cooperation with international executive search companies applying the best corporate governance practices. 26 candidates applied for the position.
“The selection process was very competitive – strong, successful and professional candidates applied for the position of general manager of the company. We believe, that Darius understanding of regional and global energy markets and ability to coordinate business and strategic interests will be very valuable to the company at its current organizational development stage”, - notices Chairman of the Board.
D. Šilenskis has been working for KN for the last five years. Until now he held the position of Director of KN Oil Business, before that – Director of the Commerce. Before KN, D. Šilenskis worked at the different companies of oil concern „PKN Orlen“, where he held various leading positions. D. Šilenskis also held office of Commerce director at the company „Krovinių terminalas“.
D. Šilenskis has a degree of Executive Master's in Business Administration (EMBA), MA in Business Management, MA in Law (International Maritime Law study programme).
“I see KN as a very vibrant, growing and rapidly changing organization. We are currently at a very interesting stage, when, due to trends dictated by the environment, we have to fundamentally transform our business. Taken this context, among my top priorities is the development of organization, which is flexible, efficient and capable to quickly adapt to changing needs of customers, at the epicentre of which is united, efficient and result oriented team”, - says newly appointed CEO of KN.
According to Žygimantas Vaičiūnas, Minister of Energy, high expectations for the new KN CEO are set. “The major task of a new head of KN is to ensure that the team of this strategic company successful implements the set ambitious targets and meets the expectations of shareholders. The first target is the continuity of the current strategic energy security projects and the implementation of decisions adopted by the Seimas in seeking to ensure the long-term LNG supply in Lithuania and reduce the cost of security component for all consumers. The second target is the ability to successfully compete in the oil loading sector. The third target is to enter the global market by developing and operating LNG terminals,“ emphasizes Minister of Energy.
D. Šilenskis shall begin his duties as CEO of KN from 11 November, 2019.
“KN has prepared new business strategy, which establishes number of ambitious goals for the company for the next ten years. When making a decision regarding the most suitable candidate for the position of CEO of KN, in depth understanding and knowledge of energy sector and energy business field, competence of business development, experience of working with international clients, orientation towards result as well as potential to unite the teams toward them, are important. According to the Board members, D. Šilenskis is the best candidate to meet these requirements and expectations”, - says Giedrius Dusevičius, Chairman of the Board.
The selection procedure of the new CEO was carried out by Independent Board of KN in cooperation with international executive search companies applying the best corporate governance practices. 26 candidates applied for the position.
“The selection process was very competitive – strong, successful and professional candidates applied for the position of general manager of the company. We believe, that Darius understanding of regional and global energy markets and ability to coordinate business and strategic interests will be very valuable to the company at its current organizational development stage”, - notices Chairman of the Board.
D. Šilenskis has been working for KN for the last five years. Until now he held the position of Director of KN Oil Business, before that – Director of the Commerce. Before KN, D. Šilenskis worked at the different companies of oil concern „PKN Orlen“, where he held various leading positions. D. Šilenskis also held office of Commerce director at the company „Krovinių terminalas“.
D. Šilenskis has a degree of Executive Master's in Business Administration (EMBA), MA in Business Management, MA in Law (International Maritime Law study programme).
“I see KN as a very vibrant, growing and rapidly changing organization. We are currently at a very interesting stage, when, due to trends dictated by the environment, we have to fundamentally transform our business. Taken this context, among my top priorities is the development of organization, which is flexible, efficient and capable to quickly adapt to changing needs of customers, at the epicentre of which is united, efficient and result oriented team”, - says newly appointed CEO of KN.
According to Žygimantas Vaičiūnas, Minister of Energy, high expectations for the new KN CEO are set. “The major task of a new head of KN is to ensure that the team of this strategic company successful implements the set ambitious targets and meets the expectations of shareholders. The first target is the continuity of the current strategic energy security projects and the implementation of decisions adopted by the Seimas in seeking to ensure the long-term LNG supply in Lithuania and reduce the cost of security component for all consumers. The second target is the ability to successfully compete in the oil loading sector. The third target is to enter the global market by developing and operating LNG terminals,“ emphasizes Minister of Energy.
D. Šilenskis shall begin his duties as CEO of KN from 11 November, 2019.
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LNG bunker supply and transportation vessel Kairos
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