Lithuania prepares to buy an LNG ship: it will not necessarily be Independence | Deal



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As said this Thursday by Mindaugas Navikas, Director of Commerce of KN, in mid-July a public tender was announced to obtain maximum transparency and the best options were sought for the acquisition of a similar or the same vessel.

The acquisition of Independence was foreseen in the charter contract, and KN has the preferential right to acquire the vessel in 2024 at the price previously agreed upon at the end of the charter contract. It is true that this is not published, but it is possible to focus on the acquisition of a ship under the “roof” published in the CN.

It is highlighted that the budget for the purchase of the ship will reach 160 million. This is the maximum loan amount.

According to Navik, the process, which consists of three stages, was launched last November. Market participants were interviewed during the research. They were asked what were the options and options to buy such a boat. A public consultation was also carried out in which the builders and shipowners were interviewed and information was provided on the conditions under which they could participate in the tender.

J. Andriejauskaitės / 15min nuotr./Laivas „Independence“

J. Andriejauskaitės / 15min nuotr./Laivas „Independence“

Three variants are named. It is also claimed that Lithuania will not be left without an LNG ship. The first option is a new boat, which can be offered by market participants, but, as M. Navikas says, it is unlikely due to price limits. Two other options are more realistic: the purchase of a used boat, of which there are around 30 in the world, or a possible offer to buy a boat that would be converted from a gas carrier into a gasification plant.

Until mid-August, the CN is awaiting initial requests from market participants with offers and decisions will continue to be made.

Responsible for LNG Projects and Regulated Activities KN dr. Arūnas Molis claims that the decision to purchase the boat was made without emotion and is logical both in terms of national security and considering the development and trends of neighboring markets.

J. Andriejauskaitė / 15 min photo / Dr. Arūnas Molis

J. Andriejauskaitė / 15 min photo / Dr. Arūnas Molis

“The myth turns out that maybe there will be two ships, no, no way. We evaluate alternatives, we choose the most economically advantageous offer. We are at the end of the process, there is competition. We are waiting until August 16 and later, if they are. applications appear and are considered valid, according to the interest of national security, the criterion would be to submit an initial proposal, “said A. Molis. If the applications have already been received and to what extent it has not yet been disclosed, but the CN representatives recall the circumstances of the charter of the ship Independence a decade ago, then three market participants were received with offers.

According to A. Molis, market participants are well aware that the conditions for the acquisition of Independence are very good, “so it is a challenge to offer even better terms even to experienced suppliers.”

“The selection of the boat is based not only on the price, but also on the costs of the cycle. The maximum price is tied to the publicly announced loan limit of 160 million. euros, ”said A. Molis.

By the end of 2022, KN must inform the owners of Independence, the Norwegian company, of the destination of the ship, if it will be acquired. And for potential builders, this would be an opportunity to undertake shipbuilding during this period.

The criteria are named

An important criterion for acquiring a boat is that it must be adapted to an existing dock. In its construction, KN and the Port Authority invested around 70 million. euros.

According to A. Molis, an important criterion is related to weather conditions: the boat must operate both in closed and open mode, which is related to the water temperature. When the water of the Baltic Sea and the lagoon is cold, a closed wheel system is used.

Furthermore, the characteristics of the acquired vessel must not be inferior to those of the existing vessel.

A long gas ride

Currently, gas reaches the LNG terminal by gas carriers from various countries, including the United States, the exotic Trinidad and Tobago, about 15 percent. It consists of gas from Russia.

According to Jurgita Šilinskaitė-Venslovienė, Commercial Manager of CN LNG, gas used to dominate from Norway, but due to an accident and a revision at the plant, the geography has changed.

Since the start of operations, 241 vessels have been accepted at the LNG terminal.

Currently, most of the gas is consumed in Lithuania, but some goes to Latvia and from there to Estonia and Finland.

Starting in 2022, according to J.Šilinskaitė-Venslovienė, there will be a natural gas connection with Poland. The terminal will also provide opportunities to supply gas to this market, which is probably the fastest growing in the entire region. Coal currently represents a significant part of Poland’s electricity and heat production, but the country plans to provide a significant part of renewable sources and gas to reduce air pollution.



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