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KN to redefine its LNG strategy

The operator of oil and liquefied natural gas (LNG) terminals Klaipėdos Nafta (KN) has selected international experts for consulting on the development of the company’s new long-term operational strategy. The tender for the consultants, launched by KN, has been awarded to the global consultancy firm Simon-Kucher & Partners.

The current business strategy of KN was drawn up in 2019 for the period until 2030, but no longer reflects the changed business and geopolitical environment in which the company operates. In the last few years number of events have had a major impact on KN activities and, consequently, on the strategy: the COVID pandemic, the events in Belarus and finally the outbreak of the war in Ukraine in 2022 and the acceleration of the pace of the green transformation because of it.

According to Darius Šilenskis, CEO of KN, the company is going through a transformation, during which expectations regarding the further diversification, efficiency, continuity of managed infrastructure operations and the importance of the entire region’s energy security, as well as the need for sustainability and decarbonisation, are becoming increasingly relevant.

“We are facing the major challenge of transforming our operations so that they meet the needs of the future and are completely climate neutral,” he said. “We understand that in the coming decades, the world will have to move away from the popular use of fossil fuels for energy and transport to other forms of energy. We have always been and want to remain an important part of the future energy supply and value chains, while continuing the successful creation of value in the energy sector, both in terms of energy security and financial return for shareholders and Lithuania at large. In this context, we need to look well ahead and review our current business model in order to ensure competitive advantage and greater profitability of our activities in the future. This is what the newly developed strategy will help us to do.”

Three potential suppliers participated in the open tender launched by KN and the consulting company Simon-Kucher was selected as the one that best met the criteria set out in the procurement conditions, the most important of which were the expertise of their consultants and the price of the services.

The company’s newly developed long-term strategy will cover the period of 2023–2050 but will be divided into three distinct phases: short-term (2023-2030), or the current evolution; medium-term (2030–2040) focusing on the role of KN in the transitional energy market; and long-term (2040–2050), which will cover the planning of the company’s activities for its journey towards full climate neutrality.

In particular, the long-term strategy will have to cover the four main activities of KN – the current oil terminal services, the LNG terminal business in Klaipėda port and in the region, the global LNG business development through operation and maintenance services and investments in LNG terminal projects and the new business lines such as hydrogen and alternative energy carriers, carbon-dioxide capture and storage.

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