Lithuanian Klaipedos Nafta (KN) has completed the procedure for the allocation of 9 TWh long-term regasification capacity for the Klaipeda LNG terminal, securing full occupancy of the terminal until 2033.
Commercial customers will use 9 TWh of 33 TWh of terminal capacity each year in 2025–2032, equally distributed among companies Achema, Eesti Gaas (Elenger) and Equinor. 24 TWh were booked earlier.
The Klaipeda terminal operator said the procedure showed a high demand for LNG terminal services with potential customers expressing intention to purchase more than twice as much terminal capacity as offered by KN.
“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 three packages of 3 TWh each, at that time the market expressed the need to reserve even 21 TWh of Klaipeda LNG terminal capacity. 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,” Mindaugas Navikas, KN Chief Commercial Officer (CCO), stated.
According to Navikas, 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, the operator noted,
Furthermore, when allocating long-term capacities, KN said the company ensures that market participants will use not only the terminal but also the gas transmission infrastructure in Lithuania.
To note, during the capacity allocation procedure, KN also offered to reserve the terminal’s capacity for the period 2033-2044. However, this offer received less market interest. The company said that one 4 TWh package was purchased out of seven offered, noting that the terminal capacity development project will be postponed for the future and LNG terminal capacity will be offered to the market at a later stage.
Navikas commented: “The energy crisis caused by Russia has led to a huge reorganization 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.”
“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.”