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Lithuania’s LNG terminal welcomes the new gas year after reaching high operating results

The new gas year just started and Lithuania’s liquefied natural gas (LNG) terminal operated by KN is welcoming it with extremely high operating results. During the last year, 23.9 terawatts-hour (TWh) of natural gas was regasified and supplied to the Lithuanian natural gas system, the largest amount to date.

“The amount of regasification is a significant indicator, which is a record this year and means that the LNG terminal, which once abolished the status of Lithuania as an energy island, in its sixth year of operation fully serves as a regional infrastructure for third parties,” said Darius Šilenskis, CEO of KN. “In other words, terminal customers can deliver LNG from anywhere and at market prices. In this way, natural gas consumers are able to pay the market price for gas as well. Without an LNG terminal as an alternative to pipeline gas from Russia, this would not be possible. Our calculations show that during the gas year 2020, more than 70 per cent of the total amount of natural gas consumption was supplied from the LNG terminal to Lithuanian natural gas consumers.”

According to him, the customers of the LNG terminal took advantage of the favourable situation in the LNG market this year, when the European natural gas storage facilities became full due to the demand shock caused by the COVID-19 virus and the warmer-than-usual winter, which also led to a decrease in LNG prices.

“As the Klaipeda LNG terminal operates on the basis of third party access and commercial clients can use its services, its use directly correlates with the price of LNG in global markets, just like other terminals, for example, Zeebrugge in Belgium, Gate in the Netherlands and others,” Mr Šilenskis added. “Global prices have little effect on those terminals where supply options are limited by consumption or long-term alternative contracts, for example, Świnoujście.”

During the last year of natural gas, 74 loading operations were performed at the LNG terminal, that is the number of gas carriers who visited the terminal, which is more than twice as much as in the 2019 natural gas year. Also, a total of 3.5 million cubic metres of LNG were delivered during the 2020 gas year, compared with 2.2 million cubic metres of 2019.

“The increase in the number of gas carriers (plus 124 per cent) was determined by the commercial decisions of LNG terminal users and for the truly competitive prices,” Mr Šilenskis explained. “As many as four LNG shipments came from the US in the 2020 natural gas year. We are waiting for another cargo from the US at the start line of the new natural gas year, it will be delivered next week. This shows that the gas liquefaction and LNG logistics infrastructure being developed in the US increases the competitiveness and liquidity of LNG as an energy source. This is certainly beneficial for countries with LNG import and regasification infrastructure. It is gratifying that Lithuania has been on the list of such countries for six years.”

According to the Head of KN, this year is impressive not only in terms of the volume of operations of the great LNG terminal, but also a significant breakthrough in the use of LNG is being felt.

“The customer of the LNG reloading station became the Polish PGNiG, the vessel bunkering operations in the port of Klaipėda has started and LNG as an alternative fuel also found itself in the perspective of the State,” he underlined.

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