Litgas and Statoil have signed a Memorandum of Understanding (MoU) regarding the establishment of a joint venture company, focusing on the development of small scale LNG bunkering services.
The joint venture company would operate in Lithuania, with its focus on supplying LNG as a fuel for ships and small terminals in the Baltic Sea, and transporting LNG by trucks to on-shore customers.
It is predicted that the small scale LNG market in the Baltic Sea can reach from 0.5 to 1 billion m3/year by 2020.
The joint venture company is expected to start its small scale LNG supply operations in 4Q17 or sooner.
“This marks an important milestone in Lithuania’s energy industry and will enable Litgas to diversify its activities internationally”, General Manager of Litgas, Dominykas Tuckus, said. “Increased usage of the Klaipeda terminal will help to reduce infrastructure and maintenance costs incurred by the Lithuanian and Baltic gas consumers and position Klaipeda as an important hub in the Baltic LNG market.”
Geir Heitmann, Chief Origination Officer, LNG at Statoil, said: “We believe that the small scale LNG market in the Baltic Sea has the potential to become commercially attractive business opportunity. The combined competencies of the two companies put the joint venture in a position to successfully develop this market and contribute to the usage of environmentally cleaner fuel in the Baltic region. Naturally, all relevant regulatory and corporate approvals will need to be obtained prior to the final investment decision.”
The possibility to co-operate on the joint development of small scale LNG bunkering services was identified in a 5-year supply contract signed by Litgas and Statoil in August 2014. This venture is to provide baseload LNG supply for Klaipeda’s LNG terminal.
Edited from press release by Callum O'Reilly
Read the article online at: https://www.lngindustry.com/small-scale-lng/03072015/statoil-and-litgas-set-to-enter-joint-venture-in-the-baltic-sea-992/