KN to undertake Klaipeda capacity study

Thursday, 29 April 2021
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Lithuanian LNG terminal operator AB Klaipėdos nafta (KN) is to launch the annual Klaipėda LNG terminal capacity allocation for the new gas year, which starts on 1st October, 2021.

“This gas year has been intense when it comes to the operation of the LNG terminal. Last year during the capacity allocation procedure the most capacity was booked in the entire history of the LNG terminal.

“At the end of the gas year a significant amount of additional capacity was booked. This was due to the low LNG prices on the market and LNG buyers in Europe actively took advantage. In the first quarter of 2021 a peak in the Asian spot market was observed, as well as the diversion of some LNG cargoes to that region, though the supply of natural gas through the Klaipėda LNG terminal remains important to its customers.

“This year may be important for customers, who are planning their activities and willing to reserve LNG terminal capacities also due to the planned completion of the GIPL connection between Lithuania and Poland, which opens up additional market potential in 2022,” explained Mindaugas Navikas, KN’s Chief Sales Officer.

During the current 2021 gas year (from 1st October, 2020 to 30th September, 2021), 41 LNGCs have arrived at the Klaipeda terminal thus far, compared with 42 last year, and another nine are due by the end of this gas year.

During this period, 1.73 mill cu m of LNG were delivered to Klaipėda, most of which (82%) came from the US.

“This year, we set ourselves the task to answer the question what long-term capacity allocation and tariff mechanism is the most suitable for operations of Klaipėda LNG terminal. For this reason, a study will be carried out by external experts comparing the capacity allocation and pricing mechanisms of LNG terminals operating in Europe.

“Finding the optimal model suitable for our terminal will undoubtedly change both the principles of capacity allocation and the pricing itself, but no changes are planned for this particular gas year yet,” Navikas added.

The total amount of the allocated LNG terminal capacity is 3.75 bill cu m. KN will accept applications from potential users of the LNG terminal to 24th May.

To undertake the study, KN has signed an agreement with Swedish-based AFRY, which will look at the long-term capacity allocation and pricing model.

The study will provide the best long-term capacity allocation mechanism as well as the tariffs applicable to the Klaipeda LNG terminal. The results are due to be presented in 2H21, KN said. 

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