The operator of liquefied natural gas (LNG) terminals KN (AB Klaipėdos Nafta) announces a consultation with market participants regarding the purchase of floating storage and regasification unit (FSRU) for Klaipėda LNG terminal. This consultation is part of the FSRU procurement process, which aims to familiarise market participants with the forthcoming procurement and to receive comments and remarks from market participants who can offer a potential solution on the submitted draft procurement documents. The purchase of the FSRU is planned for the second half of this year. 
 
According to the law adopted in 2018, KN must ensure the operation of the LNG terminal at least until 2044. This law obliges KN to acquire and own the FSRU, upon choosing the most economically advantageous solution by the end of 2024.
 
‘Klaipėda LNG terminal consolidated the country’s energy independence, opened access to the global natural gas market and served as a tool for natural gas price pressure in the region. It is, therefore, important to continue to ensure an alternative source of natural gas imports and to maintain energy security and independence. Trends in natural gas consumption, taking into account both the potential of natural gas as an energy resource and the development of the regional natural gas network, show that Klaipėda LNG terminal will play an important role in ensuring competitive, long-term and secure LNG supply to Lithuania and the region, as well as developing small-scale LNG trade and transportation by sea and road transport, and thus contributing to the goals of the green economy’, says the Vice-minister of Energy Inga Žilienė.
 
Klaipėda LNG terminal has been operating since 2014. The FSRU is leased by KN from the Norwegian capital company ‘Höegh’ for a period of 10 years with the possibility of buyout (option).
 
In order to implement the tasks assigned by the state, KN plans to start the procurement process of the FSRU in the second half of this year. The best bid received during the procurement process will be compared to the current solution according to the established cost-effectiveness criteria. A financing mechanism for the purchase of the FSRU has been secured and approved by the European Commission.
 
According to Darius Šilenskis, Chief Executive Officer of KN, the market consultation is announced for market participants, who may potentially offer the company to purchase the FSRU, to submit remarks and comments on the draft procurement documents, which may be adjusted before the procurement is announced. 
 
‘Before announcing the market consultation, we conducted a study with the help of external experts, during which we were able to define certain technological and commercial frameworks for future procurement. Based on the information gathered during this study, we provide market consultation with possible technical parameters of the FSRU, information on its compatibility with existing infrastructure — jetty and gas pipeline — and other important details to ensure full transparency of the procurement process and encourage potential suppliers. After the completion of the FSRU procurement process, the process of choosing its O&M (operations and maintenance) services will be conducted separately: with the help of external experts and in cooperation with the Lithuanian authorities, we seek to find out which FSRU O&M model would be optimal’, emphasises the head of KN.
 
During the market consultation, indications for draft procurement documents are expected from the market by May 3^rd, 2021. Following the market consultation, the acquired information will be analysed and a decision on the next steps in the vessel acquisition process will be taken. 

The operator of the oil and liquefied natural gas (LNG) terminals, KN, offers to pay dividends of EUR 5 million to shareholders (EUR 0.013 per share), i.e., 45 % of the adjusted net profit of the company.
 
KN’s dividend policy stipulates that, on the proposal of the company’s management, the board determines the amount of dividends proposed annually, taking into account the company’s financial indicators and strategy. In 2020, the company received EUR 77.5 million, and the EBITDA amounted to EUR 45 million. The company’s adjusted net profit for the year 2020 was EUR 11 million.
 
Prior to the shareholders’ decision on the payment of dividends and the share of profits to be paid in dividends, the KN management performed a sensitivity analysis of the financial condition for the period up to 2030, especially taking into account the uncertainty about oil handling volumes and other financial indicators. The aim was to assess the impact that reduced cash flows, due to adverse circumstances, could have on the company’s income and profits, both through current dividend payments, the retention of funds within the company, and the impact of such a decision on the implementation of the long-term strategy.
 
‘In 2021, KN’s performance continues to be impacted by the international pandemic, still affecting the oil segment. We will also feel the negative impact due to the suspension of the handling of Belarussian oil products through KN terminals in Klaipėda, which started at the beginning of the year. The decision on the specific amount of dividends is made taking into account the market uncertainty and responsible cash flow planning for the implementation of the strategy in the long term’, says Darius Šilenskis, CEO of KN.
 
The company’s management made a decision on dividends based on the company’s earned adjusted net profit in the year of 2020. That is, the unrealised change in foreign exchange rates and the related effect of deferred income tax arising from the requirements of International Financial Reporting Standard 16, ‘Leases’ on accounting for lease liabilities and assets, and the effect of derivative financial transactions are eliminated from net profit. Since the exchange rate of the dollar and the euro fluctuates constantly, unrealised exchange rate losses or gains are recognised in the statement of comprehensive income, which may result in either an unreasonable decrease or increase in the company’s profit. KN is neither able to predict nor control the financial results determined by the exchange rate fluctuations.
 
The proposal by KN management must be approved by the company’s shareholders at the general meeting which will be held on April 30, 2021.

Currently, the company’s board consists of Mantas Bartuška, Dainius Bražiūnas and independent board members, Giedrius Dusevičius, Bjarke Pallson, and Ian Bradshaw.
 
72.32 % of the shares belong to the state, 10.41 % are owned by the UAB concern ‘Achemos grupė’ and other shares belong to small investors. The company has been listed on the ‘Nasdaq Vilnius’ stock exchange since 1996.
 

Polish Oil and Gas Company (PGNiG) received the fifth cargo of liquefied natural gas (LNG) at the Klaipėda LNG reloading station, operated by KN. During the first full year of its use, PGNiG loaded 327 tank trucks with a total volume of 5,856 tons of LNG for sale.
 
At the beginning of April, PGNiG unloaded approx. 3 thousand cubic meters of LNG originating in Norway. Cargo supplied by Gasum arrived by the Finnish tanker Kairos. It was the fifth gas supply to the Klaipėda LNG reloading station since April 1, 2020, when PGNiG started the exclusive use of the reloading station belonging to KN.
 
'Assessing this first year of cooperation with PGNiG, we can confidently state that our efforts to create value for the growing regional LNG market have brought tangible results. We hope that this cooperation, defined by the five-year agreement, will continue to promote the opening of even greater potential in the region, especially as we see efforts in Lithuania to open up the use of LNG as an alternative fuel to commercial road transport. In that sense, Poland is an inspiring example', said Darius Šilenskis, CEO of KN.

'For PGNiG, the use of the Klaipeda station is an opportunity to expand into new markets in the small-scale LNG segment. Although still most of the loaded LNG tank trucks leaving from there are still purchased by customers from north-eastern Poland. In comparison to distance from Świnoujście, shorter routes between Klaipeda and recipients from this part of the country significantly affects the costs of transport, and therefore the price of gas supplied. Blue fuel is used not only by business customers. It also supplies LNG regasification stations in areas where the gas network does not reach. Our gas from Lithuania is also available at stations where LNG is refueled for heavy duty road transportation vehicles”, commented Paweł Majewski, President of the PGNiG Management Board.
  
So far, PGNiG has received in Klaipeda a total of approx. 8.4 thousand tonnes of LNG, which corresponds to approx. 127 GWh of energy. During the first full year of use of the station by the company, 92 percent the gas reloaded to tanker trucks was delivered to Poland, 6 percent to recipients in Lithuania, and the rest to Latvia. The contractors include PGNiG Obrót Detaliczny, for which LNG loads are carried from Lithuania by tanker trucks of Gas-Trading belonging to the PGNiG Group.
 
 

Klaipėda LNG (liquefied natural gas) reloading station operated by KN (AB Klaipėdos nafta) has reached double achievement: the 1000^th LNG truck loading operation (counting since the start of operations of this facility), as well as the 300^th LNG truck loading for the Polish company PGNiG, the sole user of the station.
 
Most of LNG (counting from the beginning of operations) were supplied to Poland (about 76%), about 16% in Lithuania by delivering to LNG regasification stations in Druskininkai and Viečiūnai, the rest exported to Latvia and Estonia. In the largest Polish market, LNG is used to supply natural gas to off-grid locations, as well as network of LNG refuelling points that is being developed for heavy duty road transport. Both LNG and natural gas are in high demand in this market, as this type of fuel has great potential for Poland in order to meet its decarbonisation targets.
 
In total, the Klaipėda LNG reloading station services has already been used by 16 different companies, including PGNiG's subsidiary PGNiG Obrót Detaliczny, which is engaged in LNG retailing, being among them. Its LNG loads are transported by LNG trucks of Gas-Trading, another company from PGNiG Group. LNG from the LNG truck number 300 was headed for regasification station which is being used by Ełk, a town in north-eastern Poland.
 
‘The operation of the LNG reloading station was definitely the right step to supplement services of the Klaipėda LNG terminal. Both natural gas and LNG will maintain a high demand in the global market for the next 2-3 decades. In the context of decarbonisation, natural gas is a crucial resource that enables the use of renewable resources and the transition to even more sustainable technologies. Balancing renewable (wind and solar) energy, cleaner marine and heavy-duty road transport fuels, blue hydrogen production are the potential directions for the future of natural gas. We are delighted that PGNiG is expanding the range of activities in Lithuania, which proves the synergy of a unified direction and the pursuit of sustainability and market development goals,’ comments Mindaugas Navikas, KN’s Chief Sales Officer.
 
„As we are getting closer to our first full year of  use of the LNG realoading station in Klaipeda, we have reached a milestone of total of 300 LNG trucks expedited by PGNiG from the facility. This is for part thanks to excellent cooperation with our Lithuanian partners from KN.  Operations from the Klaipeda station have allowed us not only to expand our small-scale LNG offer into Baltic States markets, but also provided us with an opportunity to serve our customers in north-eastern Poland, where most of LNG loads from Klaipeda are heading to – it is delivered not only to business customers, but also ends up being used in LNG regasification stations in areas without pipelines distributing natural gas,“ commented Paweł Majewski, President of PGNiG Management Board.
 
Klaipėda LNG reloading station started operating at the end of 2017. The LNG reloading station also provides LNG loading to ships, LNG bunkering, LNG loading to ISO containers services.