Klaipedos Nafta Signs Deal on LNG Investments, Lithuania

AB Klaipedos nafta and state enterprise Klaipeda State Seaport Authority have signed on Tuesday Additional Agreement to the General Bilateral Agreement on Development of Infrastructure / Suprastructure of Klaipeda Seaport regarding the investment and investment compensation order and conditions, whereby cooperation conditions between the Company and Authority with respect to development of liquefied natural gas terminal project were specified.

Amongst other things, parties have agreed on preliminary estimated investments into the infrastructure and suprastructure of Klaipeda Seaport. It is estimated that:

-Authority’s investments into the preparation of the Port for the activities of LNG terminal (dredging works, equipment of radiolocation, upgrading of systems of the Port and etc.) shall be LTL 106.426.410 excluding VAT;

-Company’s investments into the Port infrastructure (jetty and etc.), which shall be compensated by the Authority shall be LTL 54.203.577,53, excluding VAT;

– Company’s investments into the suprastructure of the Port (equipment and systems necessary for the usage of LNG floating storage and regasification unit) shall be LTL 54.804.866,77, excluding VAT.

Precise amounts of investments shall be determined following conclusion of contracts on provision of works under the procedure set by the Law on Public Procurement of the Republic of Lithuania.

Investments of the Authority into the infrastructure of the Port shall be compensated from two sources, i.e. charges paid by LNG terminal operator and third persons, which use the Port due to the reason that they are serviced or are servicing the LNG terminal and annual fee for the usage of the jetty to be paid by the LNG terminal operator, which shall be calculated based on amount of investments of the Authority into the infrastructure of the Port, provided that period of return of investments is set at 20 years and internal rate of return is set at 5 per cent. Calculated annual fee for the usage of jetty shall be decreased by amount of aforementioned charges received by the Authority for the usage of the Port and increased by amount of direct and indirect expenses of the Authority incurred with respect to LNG terminal.

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Source: Klaipedos Nafta, August 16, 2012; Image: Höegh LNG