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The fate of the Independence water liquefied gas terminal off the coast of Lithuania is being decided. The ten-year lease will expire in 2024, so its operators, the Klaipėdos Nafta company, have already announced an international tender for the purchase of a new terminal ship of this type. And he sees three perspectives for the future.
Mindaugas Navikas, commercial director of Klaipedos Nafta, says: “First, there is a new boat. We do not limit anyone to participate in the competition, this new boat can participate in the same way. The most realistic options are a used boat. Once again, there are around 30 boats of this type in the world, this is not a very active market, but in theory it can be. And the third is a converted ship, that is, those ships that bring cargo to our terminal can be converted into a storage ship ”.
The new purchase cannot be inferior to Independence, both in terms of horsepower and in terms of how much it will cost to maintain and crew.
LNG project manager Arūnas Molis states: “The characteristics of the terminal must not deteriorate. If today we are talking about a ship with a capacity of 170,000 cubic meters and a gasification capacity that meets the maximum daily needs of the country, then these parameters should not have changed in principle ”.
In addition, the loan contracted by the company for the purchase of a new vessel cannot exceed 160 million euros. So it will be very difficult for the bidders of the new terminal to offer something better than Independence for that amount.
“The answer is obviously simple: don’t get better deals. If there are no better deals, Independence will stay here,” says A. Molis.
Another argument for buying Independence is the nearby pier. It is likely that the berth of the new storage vessel will have to be redesigned, so at that time the supply of natural gas would be interrupted, so Lithuania would have to look for another alternative, albeit temporary. And so far, the only one of its kind is the Russian gas pipeline that runs through Belarus to Lithuania, which, if any of the countries so wishes, may unexpectedly fail and leave our country without natural gas.
Jurgita Šilinskaitė-Venslovienė, head of the terminal’s commercial department, says: “The LNG terminal is very important. It guarantees energy independence, offers an alternative option of where Lithuanian consumers would like to buy natural gas. “
And that is not the only argument. Currently, most of the gas from the terminal goes to Lithuania and is also exported to other Baltic countries and Finland. The Polish market will also open soon.
“Poland has defined its policy of not renewing its contract with Gazprom from 2023. Long-term contract. The Klaipeda LNG terminal can also play an important role in supplying natural gas to the Polish market. Because in 2022 there will be a connection between Lithuania and Poland ”, says J. Šilinskaitė-Venslovienė.
Specialists have no doubt that natural gas consumption in Lithuania will increase. It is true that its price will also increase. However, according to terminal operators, these trends are prevalent around the world, and the storage bin is said to help keep prices lower in Europe, simply because there is a choice of provider.
“Especially in the world, there is a growing consumption of natural gas, in markets like Asia, the annual growth is 30-40 percent of the annual consumption. Also in Latin America. And Covid was affected by the fact that the projects of new liquefaction plants that liquefy natural gas have been slightly suspended and circumstances have arisen in which demand significantly exceeds current supply, which affects global gas prices ” , says J. Šilinskaitė-Venslovienė.
According to the obligations, the owner of Independence must inform Klaipedos Nafta by the end of 2022 if Lithuania is choosing this ship. Therefore, no later than that time, a decision must be made as to which storage facility will be located on the shores of Klaipeda for the next twenty years. If Independence still decides to surrender, its fate will be decided by its current owner, a Norwegian company.
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