Press digest

2019 January 22

Lithuania LNG port aims to be Baltic hub, double flows

Lithuania LNG port aims to be Baltic hub, double flows VILNIUS: Lithuania's Klaipeda liquefied natural gas (LNG) import terminal will more than double its LNG volumes once gas pipelines to Poland and Finland open after 2021, turning the Baltic port into a regional supply hub, its operator said in an interview.

The import facility, named "Independence", was built in Klaipeda port in 2014 to break the monopoly of Russia's Gazprom over gas supplies to Lithuania, Latvia and Estonia, Baltic countries formerly ruled from Moscow.

It has chiefly imported Norwegian LNG for mostly domestic consumption, using between a fifth and a third of its annual capacity of 2.7 million tonnes of LNG, but began to diversify in late 2017 with the import of its first U.S. cargo.

"We certainly see an interest from international trading houses to use this infrastructure - the terminal and the upcoming pipelines - to access gas markets in central and eastern Europe," Klaipedos Nafta CEO Mindaugas Jusius told Reuters on Friday.

"We keep getting queries whether we have capacities available for this. The nearest LNG terminal to ours, in Poland, is fully booked until 2035", he said, adding: "Our ambition is to achieve terminal utilization of 40 to 50 percent."

Poland's Swinoujscie LNG terminal, 295 miles (475 km) west along the Baltic coast, is due to expand capacity to 5.4 million tonnes per annum by 2021 hoping to capitalise on higher gas demand in central Europe and lessen the region's dependence on Russian gas.

Between the two ports lies the Russian enclave of Kaliningrad which just this month opened its own LNG import terminal for domestic needs.

The GIPL pipeline to Poland is due to open in 2021, and with it the prospect that Lithuania supplies Ukraine, said Jusius.

This would bolster Ukraine's diversification of its own supplies from Russia, disputes with whom have led to major supply disruptions to the rest of Europe.

Klaipedos Nafta is also participating in the development of four LNG import terminals in Europe and central and southern America, with a view to becoming a shareholder and long-term operator, Jusius said.

One of the projects could reach final investment decision (FID) this year and another by 2020, said Jusius, declining to name the projects citing confidentiality agreements.

"Our ambition is to grow into the largest operator of LNG import terminals worldwide," said Jusius.

Lithuania decided last year to continue LNG imports until at least 2044. Jusius said Klaipedos Nafta will decide by late 2022 whether to buy a floating storage and regasification unit (FSRU) import terminal from Norway's Hoegh LNG.