The first quarter of 2020 was quite challenging for the energy industry worldwide, due to the spread of the coronavirus. KN, the company operating the Klaipėda liquefied natural gas (LNG) reloading station, has responded very well to the emergency, showcasing several accomplishments over the same period.
CEENERGYNEWS spoke with Arūnas Molis (pictured above), KN Klaipėda LNG director, regarding the current economic situation, the ongoing cooperation with Poland and how to keep up the LNG momentum.
As explained by KN Chief Financial Officer, Jonas Lenkšas, right after the state-level emergency was declared in Lithuania, the company adopted a range of health safety precautions for its employees and partners. And, even in the given extraordinary circumstances, KN continued its operations as usual.
“Klaipeda LNG terminal operates without disruptions as natural gas consumption and LNG demand remains stable in the region,” says Mr Molis.
The turnover remains intense, there are no signs of cancelling any LNG cargos or being unable to unload them due to COVID-19 related circumstances.
Furthermore, as a socially responsible business, KN has also donated some personal protective equipment from its own stocks for local hospitals in Klaipėda in need and allocated financial aid for purchasing medical equipment to hospitals and medical institutions.
At the same time, KN achieved some great results. Early in March, an LNG powered vessel was successfully bunkered for the first time in the port of Klaipėda, very good news for market participants and a major step forward in the field of LNG. Additionally, at the beginning of April, the Polish oil and gas company PGNiG commenced commercial operations in Klaipėda, whose station’s capacities, which will allow more efficient entry into the small-scale regional LNG market, will be reserved for the strategic partner for the next five years. Such a decision is in line with KN’s business strategy, whose main goal is to create value for the growing small-scale regional LNG market and operate profitably before 2030.
“PGNiG commenced small scale commercial operations at KN reloading station, which (in addition to large scale terminal) is part of the completed LNG value chain in Klaipėda,” Mr Molis underlines. “First commercial operations are already accomplished by PGNiG in Klaipėda, though the company‘s formal involvement started only at the beginning of April.”
We hope that with the arrival of the Polish company, the small-scale LNG trade will scale-up in the region and this will serve as the so needed impulse for further development of the small-scale LNG infrastructure.
“As a result, closer cooperation on the large-scale LNG projects is also expected,” he continues.
Indeed, LNG has a very important role to play. The latest European Commission’s gas market report underlined that, for the first time, LNG became the second source of gas to the European Union, covering 28 per cent of the total imports and surpassing the share of Norway. When it comes to Lithuania, albeit with smaller quantities, imports more than doubled. Overall, net gas imports increased by 8 per cent year-on-year in the fourth quarter of 2019 (although the overall gas import bill fell significantly due to prices going down).
Our vision is to provide access to LNG as a clean energy source, which is getting cheaper, is traded internationally under the transparent pricing policy and, at the same time, empowers the development of renewable energy sources.
“Therefore we work in order to make a significant contribution to the EU Green deal policy by increasing the consumption of LNG in transport and energy production sectors, supporting the creation of LNG small scale infrastructure, which at the same time stimulates the consumption of green gases,” reveals Mr Molis. “If this vision is strongly supported politically and appropriate financial measures are employed, the tendency which we see will continue.”
So, in short, we must keep this momentum going.
“We are working on the implementation of the long-term LNG supply solution in order to have the LNG import possibility after 2024 then-current TCP agreement with Hoegh expires,” concludes Mr Molis.