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Two Lithuanian companies sign small scale LNG agreement with Statoil

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LNG Industry,

Litgas has announced that, alongside Lietuvos Duju Tiekimas, it has signed an agreement with Statoil ASA enabling reliable and flexible wholesale LNG supplies at the Klaipeda LNG terminal and, therefore, contributing towards the development of the small scale LNG market in the Baltic region. Both Litgas and Lietuvos Duju Tiekimas are part of the Lithuanian state-owned energy group, Lietuvos Energija.

Dalius Misiunas, chairman and CEO of Lietuvos Energija, said: “We are very glad that we have strengthened our strategic partnership with Statoil. It is a major step for Lietuvos Energija, Klaipeda’s LNG terminal and for our country. We are entering into emerging Baltic small scale LNG market and the cooperation agreement not only allows to develop a successful business, but creates a potential for Klaipeda’s LNG terminal to become a regional small scale LNG supply centre as well. Important to note that this new activity would increase the usage of the terminal which, in turn, allows to lower its operational costs.”

Litgas claims that, based on recent trends, there is a need for a wholesale supply point of LNG for the small scale LNG market to develop. The Klaipeda terminal is conveniently located for bunkering operations, as it can be reached from the central part of the Baltic Sea in just one day, and from the farthest edges of the sea within three days.

Vytautas Cekanavicius, the acting Chief Executive Officer of Litgas, said: “Statoil and Litgas have established an LNG value chain for supplies to the Klaipeda terminal and such cooperation is unique in the region. Litgas is active at the Klaipeda’s LNG terminal and has experience of working with the national gas grid operator and Lietuvos Duju Tiekimas. By exploiting these advantages, we can provide services required to ensure reliable and flexible LNG supplies.”

Mantas Mikalajunas, the General Manager of Lietuvos Duju Tiekimas, said: “As the leading natural gas supplier in Lithuania, supplying gas to over 560 thousand residential and commercial clients, we can cater for flexibility needs and consequently improve LNG offerings at the terminal.”

Litgas claims that the chosen business model involves LNG modulation services at the terminal and the natural gas grid from Litgas and LDT, as well as wholesale supply from the Klaipeda LNG terminal by Statoil to clients for further redistribution to the small and medium scale segments in the Baltic region.

This model will also establish a foundation for the three companies to start out with small scale LNG activities. These activities would also contribute to decreased boil-off costs at the terminal, in turn reducing the cost of the Lithuanian natural gas system.

Edited from press release by David Rowlands

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