Statoil inks small-scale LNG cooperation deal with Lithuanian duo

Lithuanian natural gas trading companies Litgas and Lietuvos Dujų Tiekimas, both part of Lietuvos Energija, on Thursday signed an agreement with Norway’s Statoil to boost the development of the small-scale LNG market in the Baltic region.

The deal enables “reliable and flexible wholesale LNG supplies” at Lithuania’s first LNG import terminal in Klaipeda thus contributing to the development of the small-scale LNG market in the Baltic region, Litgas said in a statement.

Lithuania, the largest of the three Baltic nations, started importing the chilled fuel via Höegh LNG’s FSRU independence in December 2014 in order to reduce its dependence on Russian pipeline gas supplies.

The LNG is being imported under a revised deal Litgas has with Statoil.

“We are very glad that we have strengthened our strategic partnership with Statoil. It is a major step for Lietuvos Energija, Klaipėda’s LNG terminal and for our country. We are entering into emerging Baltic small scale LNG market and the cooperation agreement not only allows to develop a successful business, but creates a potential for Klaipėda’s LNG terminal to become a regional small scale LNG supply center as well,” said Dalius Misiūnas, chairman and CEO of Lietuvos Energija.

“Important to note that this new activity would increase the usage of the terminal which, in turn, allows to lower its operational costs,” he added.

According to the statement, the three companies believe that this segment will continue to grow in the coming years as LNG represents the best technology for marine users to comply with Sulphur Emission Control Area (SECA) requirements and competitive supply solutions are becoming more and more available.

“Based on the latest trends in the Baltic Sea small-scale LNG market, there is a need for a wholesale supply point of LNG for the small scale LNG market to develop here. Klaipėda’s LNG terminal is conveniently located for LNG bunkering: it is based in the center of the Baltic Sea and can be reached in a day from the central part of sea and within three days from its farthest points,” the statement said.

The chosen business model includes LNG modulation services at the Klaipeda terminal and the natural gas grid from Litgas and LDT and wholesale supply from the LNG terminal by Statoil to clients for further redistribution to the small and medium scale segments in the Baltic region.