Klaipėdos Nafta (KN), the operator of the Klaipėda LNG terminal, carried out a capacity allocation procedure that attracted the interest of the market, which showed a high demand for LNG terminal services – potential customers expressed their intention to purchase more than twice as much terminal capacity as offered by KN.
After the allocation of capacities, commercial customers will use another 9 terawatt-hours (TWh) of terminal capacity each year in 2025–2032, which are equally distributed among companies Achema, Eesti Gaas (Elenger) and Equinor.
The total annual distributed capacity of the LNG terminal amounts to about 33 TWh. Of these, 24 TWh were booked earlier.
“Before announcing the procedure, we recorded a great market interest in the terminal’s services and now we are clearly convinced of it – we offered a total of 3 packages of 3 TWh each, at that time the market expressed the need to reserve even 21 TWh of Klaipėda LNG terminal capacity,” said Mindaugas Navikas, KN Chief Commercial Officer. “The results show the high interest of the market participants in the natural gas market of our region, its liquidity and the proper development of the infrastructure network.”
According to him, KN strives for the terminal to operate at full capacity, as this reduces maintenance costs – each company using it pays a cost-based regasification service fee and fully covers the terminal’s annual infrastructure costs when the terminal’s capacity is fully utilized. Moreover, when allocating long-term capacities, KN ensures that market participants will use not only the terminal but also the gas transmission infrastructure in Lithuania.
During the capacity allocation procedure, KN also offered to reserve the terminal’s capacity for an even further horizon – for the period 2033-2044. This offer received less market interest – one four (4) TWh package was purchased out of 7 offered.
“The energy crisis caused by Russia has led to a huge reorganisation of the gas supply market in Europe – the construction of a number of new LNG terminals has started or the intention to build them has been announced, therefore market participants tend to wait and see which projects will be implemented and how quickly they will change the overall supply balance,” added Mr Navikas. “Another important aspect is geopolitical instability, which was also caused by the war in Ukraine caused by Russia. The recent incident with the Estonian-Finnish gas connection Balticconnector once again confirms that there are still many operational risks. All these circumstances shorten the planning horizon, which is why only a few organizations – at least at the moment – are willing to commit themselves 20 years ahead.”
After assessing the low interest in long-term capacity after 2033 and the potential growth of LNG supply in the region and other risks, KN decided to postpone the terminal capacity development project for the future and will offer LNG terminal capacity to the market at a later stage.
