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KN to use experts to implement LNG supply project

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LNG Industry,

KN (AB Klaipedos nafta), the operator of oil and LNG terminals in, will use external expert services to implement the long-term LNG supply project in Lithuania. In this step, KN continues the implementation of the LNG long-term supply solution and announces a public market consultation on the planned procurement of legal expert services. KN plans to announce procurements for such services that are necessary for the effective implementation of the long-term LNG supply solution.

Under the Law on LNG, KN is obliged to acquire and operate a floating LNG storage and regasification unit (FSRU) by 31 December 2024 at the latest, i.e. to become the owner of the whole infrastructure and superstructure. The company must choose the most economically advantageous offer and ensure reliable operation of the LNG terminal by 2044. In order to achieve these goals, the missing competencies will be used to develop strategies and contracts for the acquisition and management of FSRU maintenance services. Various alternatives will be considered with the help of external experts, including (but not limited to) the acquisition of the existing FSRU Independence.

According to Darius Šilenskis, General Manager of KN, the law provides for a clear time frame for the implementation of the LNG long-term solution project, and external competencies are used in order to implement the project in a timely manner and at the lowest possible cost, in accordance with the principles of transparency, equality, and promotion of competition.

“The project requires specific competencies, such as ship brokers, ship classification specialists, as well as lawyers specialising in the LNG ship industry. That is why the aim is to use the services of external experts,” explains D. Šilenskis.

The expertise of external experts is necessary to avoid delays, errors and financial and other losses in the future. Until the end of this year, KN also plans to procure the services of other external experts which will help to prepare the FSRU acquisition process and technical specifications. Public consultations will also be announced prior to these procurements.

Public market consultation prior to the award of contracts for the services of external experts is a good practice of contracting authorities which is promoted by the EU. Prior to initiating the procurement procedure, public procurement operators may consult potential suppliers as part of a broader market analysis process.

“Market consultation allows contracting authorities, such as KN, to better understand the structure of the market and the possibilities of suppliers. According to the Public Procurement Directives, preliminary market consultations have two objectives: to gather information from the market and to inform about procurement plans. Prior market consultation is particularly important for complex procurements that require a high degree of preparation. In this case, the implementation of a long-term LNG supply solution is a complex process, where errors need to be minimised at each stage. On the basis of the information received during the consultation, KN will be able to develop more precise specifications for the services to be procured and to be better informed about the choice of the most appropriate procurement procedure, planning the appropriate duration of the procurement process,” - the need to publish a public market consultation justifies D. Šilenskis.

According to him, when implementing the long-term LNG supply solution and preparing for the acquisition of the FSRU, even more attention will be paid to market analysis during the preparation of the FSRU operation strategy, justifications for registration and flag selection technical specification of the FSRU procurement documents, selection criteria, evaluation of tenders, FSRU purchase-sale agreement and/or operation agreement, in order to prepare a list of storage vessel takeover works and conditions and to participate during the takeover of the storage vessel itself in order to fulfil the envisaged conditions, etc.

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