KN (AB Klaipedos Nafta), the operator of oil and LNG terminals, has completed the annual procedure of allocating LNG terminal capacities for the new gas year, which goes from 1 October 2020 to 30 September 2021. During this procedure, two customers have signed agreements for the regasification capacity of 8.4 TWh of LNG.
As a comparison, 5 TWh was allocated during last year’s annual capacity allocation procedure, and as much as 22.139 TWh of natural gas was regasified throughout the entire year.
During the current gas year (from October 2019), 49 gas vessels arrived to the LNG terminal, and another 21 gas vessels are expected by the end of the gas year. During this period, 2.4 million m3 of LNG or 15.2 TWh of natural gas were delivered through LNG terminal, when the total consumption of natural gas in Lithuania during this period was 17.3 TWh – more than 87% of natural gas is supplied through the LNG terminal. 69% of LNG is imported from Norway, 18% from the US, and 12% from Russia (small cargoes).
“In the operation of the LNG terminal, we can see that that terminal users clearly have a tendency to order free capacities of the terminal during the gas year rather than reserve them during the annual capacity allocation procedure. This practice is due to low global LNG prices, which have prevailed since the beginning of the year, as well as the related dynamics in the spot market. The LNG terminal allows customers to respond flexibly to current market changes and adjust transhipment and transhipment needs at the terminal accordingly. The users of the terminal highly appreciate such flexibility from the terminal, particularly in comparison with the import of gas through the pipeline, which is unable to provide this flexibility,” said Arunas Molis PhD, Head of the KN Regulated Activities and LNG Project Manager.
According to A. Molis, LNG will continue to be the energy source that guarantees transparent pricing, acceptable price levels, and the ability to respond flexibly to the demand for natural gas, with the data showing that as much as 34% of the global LNG market transactions are one-off transactions or those under short-term contracts.
“In the case of surplus gas in the market, it is important for suppliers to dispose of the extracted quantities and expand the market, and LNG terminal customers in the Baltic States have successfully utilised this, by placing on the scales the costs of gas imported through pipeline and LNG prices in the market for comparison. Thus, by having the LNG terminal as an alternative to the pipeline, Lithuanian natural gas consumers receive greater financial benefits over the year than all the annual costs associated with the terminal,” A. Molis said.
The total amount of allocated LNG terminal capacities reaches up to 3.75 billion m3, which is 44 TWh per year, with a relative expansion factor of 1:580 and a maximum calorific value of 11.85 kWh/m3 for natural gas. The Company regularly updates its website with the latest information regarding the available capacities of the LNG terminal, which can be reserved during the gas year as well.
The Company allocates capacities in accordance with the Regulations for Use of the LNG terminal, which were agreed upon and approved by the State Energy Regulatory Council and the CEO of KN, and made available to the public.
Read the article online at: https://www.lngindustry.com/liquid-natural-gas/05062020/klaipda-lng-terminal-capacities-have-been-allocated/