Energy, Financial Services, Gas, Legislation, Lithuania, Transport

According to Lithuanian Prime Minister Algirdas Butkevicius, the Klaipeda LNG terminal's floating storage and regasification unit (FSRU), which the state-controlled company operates under a long-term charter contract with Norway's Hoegh LNG, is planned to be purchased in 2024.

"We have drawn up a lease refinancing plan and have changed the very principle. (We have decided) to borrow in amounts of 15 million to 20 million euros, rather than in one lump sum. We are currently talking to banks and I believe we will select a bank shortly to lend us the money for this year," Klaipedos Nafta CEO Mantas Bartuska told BNS.

According to him, if the government gives its final approval to purchase the Independence FSRU vessel in 2024 after the ten-year charter period expires, loans could be paid back over a longer period. It is estimated that the FSRU could be used for a total of 30 years.

Bartuska underlined that the decision to purchase the vessel in 2024 would depend on whether banks agree to provide loans.

"It will be a rather unique and complex financing model and a completely new one for banks, but it seems that it will be possible to implement it. Our aim will be to reduce the LNG terminal tariff," he told BNS.

Butkevicius confirmed to BNS that the government's commission in charge of the LNG terminal project in Klaipeda, which he heads, had discussed the borrowing model during its recent meeting in Klaipeda.

According to the prime minister, Lithuania last year asked Hoegh LNG, the owner of the ship, whether it would be possible to purchase the vessel before 2024, but the answer was negative.

The contract, which took effect in December 2014, also gives Lithuania an option to extend the charter after it expires, but the government has already said that it will not use it.

Neither the value of the Independence nor its purchase price has been disclosed to the public. BNS estimates that it may cost up to 170 million euros to buy the vessel after the charter period expires.