Lithuania signs LNG import deal with Statoil

Looking to free itself from the dependence on Russian gas, Lithuania signed its first LNG purchase deal with Norway’s Statoil.

Starting in 2015, Statoil will be supplying an annual volume of 540 million cubic meters of natural gas (approx. 950 thousand cubic meters of LNG) 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 Lithuania’s Ministry of Energy.

Under the mid-term contract, worth about $1-1.1 billion, the first LNG cargo is expected to be delivered to the Klaipėda terminal at the end of December 2014 so that the terminal could start commercial operation from the 1st of January 2015. Each year Statoil will deliver 6-7 such cargoes to Klaipėda port.

The contract also provides possibilities for cooperation in LNG reloading which is a new type of activity in the Baltic Sea region. Gas in liquid form would be pumped to smaller tonnage vessels at the Klaipėda terminal and shipped to small 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.

The price of LNG supplied to Lithuania will be linked to the value of the NBP index (the UK’s natural gas exchange).

LNG World News Staff, August 21, 2014; Image: Klaipedos Nafta