Lithuania Seeks FSRU Buyout
Lithuania will buy the Klaipeda LNG terminal's floating storage and regasification unit (FSRU) outright, once its lease from Norway’s Höegh LNG expires in 2024, the government's Economic Infrastructure Development Commission has decided.
“Given Lithuania's need for securing long-term LNG supply in the future, both for its energy security and competitive prices, we chose the option that provides the greatest economic effect and is strategically the most sustainable in the long term," energy minister Zygimantas Vaiciunas said August 20 (below). The ministry said a buyout of the FSRU would slash the LNG terminal maintenance costs by around 40%.
FSRU Independence has a storage capacity of 170,132m³ and regasification capacity of 4bn m3/yr (384mn ft3/d) and has been in service in Lithuania since late 2014.
In the commission's opinion, long-term borrowing from banks by Klaipedos Nafta, the terminal's operator, will help reduce the terminal's costs for end users, especially for fertiliser manufacturer, Achema, the largest industrial gas consumer in the Baltic Republics, and power producers. Last week, the economy ministry proposed to halve Achema’s current €20mn/yr ($23mn) fee starting 2019; that fee goes to help pay for the cost of chartering FSRU Independence. Achema has long complained about the fee and said it would comment on its reduction this autumn.
A long-term lease of the FSRU was the other option considered by the commission. It’s less clear whether Hoegh has yet agreed to the outright sale of its FSRU. Lithuania estimates that between €120mn and €160mn ($137mn-$183mn) will be required for a buyout, but the exact price embedded in its contract with Hoegh is confidential.
It is also proposed to spread the terminal's costs for users over a longer period of time, which will help reduce these costs from €66mn to €43mn annually, starting in 2019.
Lithuania's energy minister Zygimantas Vaiciunas. The banner photo shows the FSRU Independence on the right (Credit for both photos: the energy ministry)