BNK (UK) Limited informed KN about the temporary suspension of oil products sales through Klaipėda. In the future tenders announced by BNK Klaipėda will not be indicated as their sales point. All contracts between BNK and KN remain in force, but the contractual obligations are suspended until further notice. Cargo, albeit to a lesser extent, is currently being sent to Klaipeda and reloaded at the KN oil terminal for further export.
 
According to Mindaugas Navikas, KN Sales Director, given the available information, it is currently difficult to accurately assess the possible impact of such a BNK decision on KN's activities. However, until the KN customer resumes normal trade volumes when loading oil products through Klaipeda, the probability that Belarusian cargo will not be sent to Lithuania is assessed as sufficiently real and therefore it is necessary to prepare for various business scenarios.
 
"Judging by economic arguments, the infrastructure in Klaipeda is the most advantageous for the export or, if necessary, import of oil products for Belarus. We are currently working with customers in Belarus on a regular basis, we have scheduled cargo for the nearest future. However, we understand that customer decisions are likely to be dictated not by economic but by political logic, which we cannot control. We carefully evaluate all the information available to us from Belarus this year and adapt our business plans accordingly by diversifying our activities, expanding the circle of services and customers,” says M. Navikas, KN Sales Director.
 
According to M. Navikas, taking into account the uncertainty about the situation in Belarus this year, KN devoted to the search for new business opportunities in 2020. These include oil storage services, the demand for which has grown significantly this year due to the coronavirus pandemic and historically low refining margins.
 
"In 2020 KN was able to successfully respond to the changing needs of its customers and offer storage options for oil products. We also see further demand for the lease of oil terminal tanks and the storage of products on long-term contracts. We have already concluded several contracts for such services, including contracts for the lease of petrol tanks, which will allow us to employ the existing infrastructure. We see this as a fairly stable alternative to the handling of light oil products,” M. Navikas emphasizes.
 
Along with the development of oil product storage services and the growing demand for them, the company plans to expand the scope of ship-to-ship handling operations, taking advantage of the flexibility of the managed infrastructure.
 
“Our competitive advantage is that we are a multimodal terminal, where oil products can be both unloaded and loaded from and to all kinds of transport. We currently load a double-digit number of different positions in the terminal, such as conventional petroleum products, petrochemicals and various biofuels. In KN's business strategy 2030, we envisage further diversification of the product and service portfolio, in order to avoid the dominance of one customer or one cargo,” emphasizes the Sales Director of KN.
 
In the first 9 months of this year, KN received EUR 23.7 million in the oil business segment (EUR 23.9 last year). The adjusted net profit from these activities amounted to EUR 6.7 million (EUR 7 million in the corresponding period in 2019). Assessing the company's and market analytics data, KN continues to be the most efficient company using the capacity of its oil terminals in the Baltic States.
 
BNK (UK) Limited is owned by ZAT Belaruskaja neftenaja kampanija, the largest exporter of petroleum products in Belarus.