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International Internet Magazine. Baltic States news & analytics Tuesday, 19.03.2019, 08:22

Decision on LNG terminal due by end of year - Lithuanian energmin

BC, Vilnius, 09.08.2018.Print version
Lithuania's government plans to make up its mind on the Klaipeda-based LNG terminal by the end of this year, Energy Minister Zygimantas Vaiciunas says LETA/BNS.

Lithuania is likely to buy the FSRU Independence, an LNG carrier serving as a floating LNG storage and regasification unit, as international consultants recommend.

According to the minister, the terminal's operator, Klaipedos Nafta, has in essence finished the additional analysis on which option – acquisition or lease – is most beneficial for the country.

"Klaipedos Nafta was asked to provide the assessment of the optimal model, to once again evaluate the consultants' assessment and also look at all risks and possibilities from their perspective. That assessment is in essence finished and we plan decisions at the infrastructure commission by the end of August. And then the whole work will move to the government," Vaiciunas told.

In his words, the final decision on the LNG terminal is expected by the end of this year.

Vaiciunas also reminded that international consultants recommend buying the ship out as it would be a more cost-effective solution then a long-term lease.

"The advantage of the acquisition was stressed very much, that this scenario is more flexible in terms of the formation of the gas market. If gas demand goes down, so the buying scenario allows using the ship in a more flexible way. This is what the consultants said and we just repeat their arguments," Vaiciunas told.

Poyry Management Consulting presented a study in April, stating that it would be most beneficial for Lithuania to buy the LNG storage vessel, and the decision to extend the lease agreement for another 20 years would be less beneficial.

Vaiciunas told earlier that the government had already made up its mind to buy the ship, using loans and EU funds. Meanwhile, Klaipedos Nafta CEO Mindaugas Jusius told a the company would take bank loans.

Lithuania is looking for ways to cut the terminal's maintenance costs as gas consumption is decreasing in the county and the burden of maintaining the LNG terminal is going up. This year, the costs will stand at around 86 mln euros.

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