On Wednesday, the LNG reloading station operated by liquefied natural gas (LNG) and oil terminal operator KN (Klaipėdos nafta) carried out the 10th operation of reloading LNG from a gas carrier to ground storage tanks. With the global increase in the small-scale LNG market, an interest in the LNG reloading infrastructure located in Klaipėda has also been growing.

The tenth LNG reloading operation has been carried out at the LNG reloading station by the LNG transportation and bunkering ship “Kairos” that has carried gas to the station from Klaipėda LNG Terminal and is chartered by KN together with a partner. This is the third operation by “Kairos” in Klaipėda this year. Since the beginning of operation of the LNG reloading station in October 2017 gas carriers chartered by “Shell”, “Gasum” (former “Skangas”) and other companies have also moored at the KN berth. 

Market participants in Klaipėda have been more actively using not only the service of LNG acceptance from gas carrier ships and temporary storage, but also the service of LNG reloading to LNG semi-trailer trucks. In 2018, tank semi-trailer trucks were loaded with 240 units of cargo or over 64 000 MWh of LNG, and gas was transported to Lithuanian, Estonian, Latvian and Polish clients. 

“The LNG infrastructure in Klaipėda developed by KN as well as favourable global growth trends of the small-scale LNG market open up opportunities for us to generate extra revenues from commercial activities. These funds could be allocated for the reduction of costs of maintenance of the current natural gas infrastructure, thus respectively contributing to the reduction of expenses related to the maintenance of the LNG Terminal with respect to consumers,” notes KN CEO Mindaugas Jusius.

The rapid global expansion of the small-scale LNG market is opening new opportunities for the LNG reloading station in Klaipėda. According to the forecast of the international consulting company Energias Market Research, the growth of the small-scale LNG market will triple by 2030 and will mainly focus on the markets of LNG-fuelled road transport, supply for consumers not connected to gas pipelines, and LNG as marine fuel. The latter will be particularly relevant across Europe because stricter global sulphur limit regulations in shipping will become effective next year, resulting in cleaner fuel to be used in ships.
“The number of LNG-fuelled vessels, more than a half of which are used across Europe, has been rapidly increasing worldwide, and the LNG bunkering infrastructure has been developed and expanded in many ports. International analysts forecast that 2019 will be the year of expansion of the small-scale LNG business. KN has been ready to start this year – we have all necessary tools in Klaipėda to supply the cleanest marine fossil fuel with minimum emission to the sea in all Baltic Sea ports. Moreover, the services of the LNG reloading station are open to all clients; therefore, LNG can be used as a cleaner fuel alternative by all who want to use it,” pointed out Mr. Jusius.
The group of clients of the LNG reloading station is also expanded by the increasing number of operations of small-scale LNG carriers. In late January, Klaipėda LNG Terminal carried out the 20th reloading operation, and since early 2017 – the start of this type of activities – small-scale carriers reloaded almost 144 000 m3 of LNG (in 2018 – 47 200 m3).

Klaipėda liquefied natural gas reloading station is an above ground LNG Terminal operated on the third party access basis, which started its operation on 27 October 2017. The LNG reloading station located next to the gate of the port of Klaipėda has five above ground LNG tanks with the capacity of 1 000 m3 and the facilities of bunkering, LNG reloading from and to ships as well as semi-trailer trucks. 
 

KN, the operator of oil and liquefied natural gas (LNG) terminals, is ranking third among companies recognised the best in the category “Investor Relations of the Year” of the Nasdaq Baltic Awards 2019. KN was granted this award for maintaining high standards in relations with investors.
 
The title of “Investor Relations of the Year” was awarded to companies by taking into consideration the high standards of transparency, social responsibility, disclosure of information to investors as well as the active involvement of investor community and participants of the capital market.
 
The Nasdaq Baltic-listed companies were assessed in terms of shareholder returns and trading activity, excellence in corporate governance and transparency, and how market participants and professional investors view them.
 
“We strive for the highest governance standards in our activity – this is vital for us in maintaining relations with shareholders and investors in the Baltic countries as well as dealing with clients and partners from around the world. KN has big ambitious with respect to operating at the international level, so this recognition is very important in strengthening the reputation of KN as a reliable and professional company which is focusing on sustainable business. The award granted to us shows that we are on the right path. We would like to thank all KN team for its efforts that led us to be among the most outstanding companies in the Baltic countries,” emphasized CEO of KN Mindaugas Jusius.  
 
The new concept Nasdaq Baltic Awards 2019 is a biennial joint initiative of the Nasdaq Baltic exchanges and Nasdaq CSD. The Nasdaq Baltic Awards 2019 was carried out by the experts of the Baltic market and the international capital market, corporate governance, transparency and investor relations.
 
For more information about the awards, visit: https://nba.nasdaqbaltic.com/en/press-center/nasdaq-announces-winners-of-nasdaq-baltic-awards-2019
 

The year of 2018 was full of challenges for KN (AB “Klaipėdos nafta”) – the operator of oil products and liquefied natural gas terminals: the situation in the market was tense and dynamic with the geopolitical environment being the intensive irritant and the growing costs being the major concern. Nevertheless, a slight decrease was witnessed in the last year’s flows of oil products and natural gas cargoes, if compared to 2017, and the company has managed to achieve the scheduled profitability indicators.
 
Because of the risks related to the tense geopolitical situation and the investments focused on the newly developed activities aimed at enhancing the company’s competitiveness by attracting transit flows of oil products in the future, in 2018, KN planned a far more conservative budget and declared the goal to earn EUR 10.2 million of profit.
 
In accordance with non-audited financial statements, in 2018, the company achieved its goal and earned the net profit of EUR 11.5 million. The company earned EUR 100 million in revenues, whereas in 2017, it earned EUR 106.5 million.
 
The summarised non-audited data of 2018 shows that last year KN’s turnover of oil products reached 6.69 million tonnes, whereas in 2017 it amounted to 7.18 million tonnes. The slight decrease in the loading was determined by lower flows of refined oil products from the refinery of “Orlen Lietuva”, since it directed more of its production by railways to neighbouring countries.
 
“Despite the tension between the neighbouring states in the sector of oil and oil products logistics observed in 2018, we were successful in preserving stable transit cargo flows. The last year’s general decrease in these flows amounted to 5.3%. KN still occupies the leading position among all other oil product terminals of the Baltic Sea rim, except for the Russian port of Ust-Luga,” notes Mindaugas Jusius, CEO of KN.
 
The slightly lower oil product loading influenced the sales revenues of Klaipėda and Subačius oil terminals, which earned EUR 35.2 million, i.e. 7% less than in 2017.
 
According to Mr. Jusius, it is expected that after the 2nd stage of investments, during which 10 new storage facilities, a new unloading overpass and a new railway line will be constructed, is over, it will be possible to increase the flow of oil products up to 7.2 million tonnes. The implementation of these projects will enable the KN oil terminal not only to reload bigger amounts of oil products, but also to accept a wider range of oil products and their components.
 
In 2018, a total of 9.2 thousand MWh of gas was regasified and reloaded at the LNG terminal compared to 12.6 thousand MWh regasified and reloaded in the same period last year. The scope of activities of the LNG terminal was lower due to the lower terminal users’ demand for capacities, which is related to the growth of LNG prices. This also influenced the revenues of the LNG terminal, which amount to EUR 64.5 million and are 5.4% less than the amount of revenues received in the same period of 2017.
 
Last year, the chain of activities of LNG terminal was enhanced with an LNG distribution station, where a total of 64 thousand MWh of LNG was reloaded in 2018. The newly developed LNG logistics chain of the Baltic Sea Region has also been strengthened by the world’s largest LNG feedering and bunker vessel “Kairos”. The vessel used for LNG reloading operations from Klaipėda LNG terminal to the LNG distribution station situated next to the gates of the Port of Klaipėda has already performed two small-scale reload operations this year.
 
“Kairos” will help assure a more competitive price of the LNG supply chain and a smooth and prompt service provision for users of the distribution station,” Mindaugas Jusius, KN CEO, said.
 
According to him, this year, KN will pay much attention to the LNG operative line, which will also be reflected in the long-term strategy of the company to be presented in 2019. Seeking to use the accumulated experience, KN is planning to develop other LNG terminals on various continents, to become a shareholder of developed terminals and to provide the services of operation and maintenance. 
 
“The company is now facing the time of very responsible decisions. On the one hand, we have to get ready for additional financial liabilities while preparing for the decision delegated to us by the state regarding assurance of the long-term LNG import, and on the other hand, we have to meet the expectations of the shareholders and to earn the set return. We see large potential in the increase of the export of our accumulated specific knowledge (know-how). We have a clear vision, which is based on the development of international LNG terminals in other states, and we have ambitious plans for development on the global market,” KN CEO shared the company’s plans.
 
The energy sector, similarly as other sectors, does not have an immunity against the growing costs. With the growth of costs being as fast as the growth of revenues, the operational efficiency becomes relevant more than ever.  Therefore, this year KN will pay more attention to the decrease and efficiency of costs in all fields of the organisation. The company has been applying the policy of cost reduction since the last year’s early December. It has thoroughly reviewed and improved all of its operational processes, and largely undercut the costs when forming this year’s budget.
 
Despite the fact that the company will not postpone the planned investments into the environmental protection which are provided for in the Plan of Environmental Measure drafted and publicly presented last year.
 
“We have committed to communities to further develop sustainable activities and ensure the highest environmental standards, and we are going to do that. We expect that KN investments into the environmental field will reach EUR 8 million by the end of 2021,” Mr. Mindaugas Jusius estimates.
 
Seeking long-term goals of the organisation, last year the company paid a great deal of attention to the enhancement of the organisational culture: it further introduced updated virtues, on the basis of which the new Code of Conduct of KN was approved. This Code of Conduct is relevant not only for KN employees, but also for members of the Board and the Supervisory Council as well as for KN partners, clients and suppliers.
 
This year’s changes in the organisational culture of KN also include the implementation of the changes in the system of motivation, which provide for payment of part of rewards to employees via the shares of the company.
 
According to Mindaugas Jusius, KN CEO, with this decision the company seeks to enhance the employees’ motivation for achievement of long-term goals of the company, enhance the employee involvement and promote the responsibility for common operational results.
 
 

KN (Klaipėdos Nafta), oil and LNG terminal operator, has selected international experts, who will consult company on the preparation of the new 10-year operational strategy. Global strategy consulting firm Roland Berger won the consultancy tender announced by KN.
 
KN’s current business strategy is valid until 2020, so the company has already begun preparing a strategy for the new 10-year period to 2030.
 
“In future, we are expecting ambitious development in the global LNG market. In order to take advantage of the experience accumulated in Klaipėda, we intend to develop other LNG terminals on different continents, become joint owners of the developed terminals, and provide operation and maintenance services. So in developing the strategy, information and assessments are required about the experience of the world’s best infrastructure companies, the target return to shareholders, and risk management,” Mindaugas Jusius, KN CEO, develops on what prompted to look for consultants.
 
The public tender announced by KN was open to all consulting companies meeting the criteria laid down in the terms of procurement, the most important being the price of services and the competence of the consultants.
 
 “Not only technological knowledge, but also business management competencies and in-depth interest in both the global context and that of Lithuania’s neighbouring countries was important for us in this selection process, as well as economic value,” says Mr Jusius.
 
M. Jusius notes that Roland Berger – the company that won the tender – stood out from the rest for its good knowledge of global gas and oil business trends and its deep understanding of the regional context pertinent to KN.
 
The tender drew in a total of six participants from Lithuania and other European countries, which were evaluated by a committee of KN employees from the procurement, finance, and business analysis divisions. The procurement was also supervised by Public Procurement Office specialists, with whom the process of the procurement was discussed.

It is expected that the new KN strategy will be prepared during Q1 of this year.