The Board of AB Klaipedos nafta (KN) has taken the decision to acquire the LNG storage unit Independence currently leased by the company, or another floating LNG storage unit (FSRU) no later than 31 December 2024. The decision was also made to apply to the National Energy Regulatory Council with proposals for the reduction of the LNG terminal security additional component to the natural gas transmission price.
The acquisition of FSRU would be financed by loans and other measures. The Board adopted the decision by implementing the provisions of paragraph 6 of Article 9 of the Law of the Republic of Lithuania on the LNG rerminal, based on which the LNG terminal operator, implementing the provisions of the National Energy Independence Strategy and the Law on the LNG terminal, no later than 31 December 2024, would acquire the title to the FSRU and would become its operator. In addition, the company’s management is committed to agree with financial institutions regarding financing for the acquisition of FSRU by the end of April 2020, and to ensure the respective state aid clearance by the end of May 2021.
The main terms of the acquisition of the specific FSRU and the final decision will be approved in a separate meeting of the Board.
The Board also decided to conclude an agreement for a loan with the Nordic Investment Bank (NIB) on behalf of the company, borrowing from the NIB up to €135.5 million for a period of up to 26 years, and to provide NIB with additional securities for repayment of the Loan for Stage I with the purpose to finance the rent payable by the company under the time charter party of 2 March 2012, signed between the company and UAB Hoegh LNG Klaipeda (previously, Höegh LNG Ltd.). The loan would be used for the reduction of the security component. It is planned that security component could be reduced from the year 2020 approximately by €27 million, as set forth in paragraph 4 of Article 5 of the Law on the LNG terminal.
The decision to enter into an agreement with the NIB regarding the Loan for Stage I will be approved at the General Meeting of Shareholders.
Read the article online at: https://www.lngindustry.com/liquid-natural-gas/05112019/klaipedos-nafta-to-acquire-an-fsru-by-2025/