LITGAS to develop Statoil LNG activities

The contract also covers possibilities of LNG reloading – a new commercial activity in the Baltic Sea region. Gas in liquid form would be pumped to smaller tonnage vessels at the Klaipėda terminal and shipped to smaller terminals. Successful development of commercial reloading operations would increase the usage of the terminal and would at the same time lower its maintenance costs which are being covered by Lithuanian consumers.

“This strategic contract will help to ensure the availability of an alternative natural gas import source which will enable us and other Lithuanian companies to procure natural gas on international markets from various suppliers at any time,” said Dominykas Tučkus, general manager, AB LITGAS.

“We are delighted to sign a contract with LITGAS. At the same time this contract marks our first step with LNG business in the Baltic Sea region. We hope that will evolve into long-term partnership and will bring mutual benefits to both parties,” added Geir Heitmann, vice president, Statoil LNG Trading and Operations.

LITGAS says the price of LNG sold to Lithuania will be linked to the value of the NBP index (Great Britain’s natural gas exchange). “This type of pricing is new to Lithuania and this means that the price of natural gas supplied by LITGAS will depend on changes in the supply and demand for natural gas, including LNG on the international markets as well as seasonal temperature fluctuations,” added Mr Tučkus.

Starting in 2015, Statoil will supply an annual volume of 540 million cubic meters of natural gas to ensure continuous operations of the Klaipėda LNG terminal. LITGAS has an obligation to ensure this supply volume as the designated supplier approved by a decree of the Ministry of Energy.

The first LNG cargo is expected to be delivered to the Klaipėda terminal at the end of December 2014 so the terminal can begin operating on 1 January 2015. Each year Statoil will deliver around six such cargos to Klaipėda Port.