Lithuania Inks First Statoil LNG Deal

Posted by Joseph Keefe
Thursday, August 21, 2014

Lithuania seeks to cut dependence on Russia; Statoil to supply 0.54 bcm of gas per year. This will cover about 20 pct of Lithuania's demand.

Lithuania signed its first liquefied natural gas purchase deal with Norway's Statoil on Thursday, helping the country to reduce its total dependence on Russian supplies.

The Baltic state plans to import 0.54 billion cubic metres (bcm) of gas from Norway from 2015, enough to meet about one-fifth of its total consumption.

The gas will supply a floating LNG terminal, named the "Independence". The total value of the contract is estimated at a little over $1 billion and the LNG price is linked to Britain's National Balancing Point (NBP) gas hub, Lithuanian importer Litgas said.

"For the first time in Lithuania's history we will have an alternative source of natural gas supply," Lithuania's Prime Minister Algirdas Butkevicius told a news conference after the deal was signed.

"It's a big step in boosting Lithuania's energy security and creating a possibility to lower gas prices for consumers," he added, although industry data show that the imported LNG would currently not be cheaper than Russian pipeline gas.

Lithuania will pay 900-1,000 litas ($346-$384) per 1,000 cubic metres for the Norwegian gas based on NBP prices for the last four months, Litgas said, comparable to the oil-indexed price of $359 per 1,000 cubic metres paid for pipeline gas supplied by Russia's Gazprom, data from Lithuania's energy market regulator showed.

While the LNG imports may not be cheaper than current Russian pipeline gas, the alternative supply option did put pressure on Gazprom to offer a lower price.

Lithuania was paying a much higher price for Russian pipeline gas until May, around $465 per 1,000 cubic metres, when Gazprom agreed to cut it facing a threat of international arbitration and the start of LNG imports.

BALTIC LNG DEMAND TO RISE


The amount of natural gas to be imported from Norway translates into 6-7 LNG cargoes, a relatively small deal for the Norwegian energy major, but Statoil said it expected demand from LNG import terminals in the Baltics to rise as Lithuania's is only one of several such projects in the region.

"We think that demand for LNG in smaller quantities will increase in the region and that is the development that we would like to participate in," Statoil's Vice-President Geir Heitmann, told journalists.

Spurred by the Ukraine crisis, Baltic states such as Poland, Lithuania, Estonia and Finland are fast-tracking plans to boost LNG imports, hoping to drastically cut Moscow's grip on the region's supply.

Statoil has also won a deal to send a single LNG tanker that will commission the floating terminal in autumn.

Litgas, a gas trading arm of Lithuania's state-owned energy group Lietuvos Energija, has also signed 12 non-binding Master Sale and Purchase agreements with global LNG suppliers to have an option to buy LNG cargoes on the spot market if needed.

At full capacity, the Lithuania terminal will have the capacity to import up to 2 billion cubic metres (bcm) of gas from 2015, with an option to lift output up to 4 bcm.

The Baltic state consumed less than 3 billion cubic metres of natural gas in 2013.


By Andrius Sytas

Maritime Reporter August 2014 Digital Edition
FREE Maritime Reporter Subscription
Latest Maritime News    rss feeds

People & Company News

Keystone XL Costs to Nearly Double - TransCanada

The total cost of TransCanada Corp's controversial Keystone XL pipeline is likely to nearly double following six years of regulatory delays, a company spokesman said on Friday.

Chevron To Find Buyers for Hawaiian Refinery

Chevron Corp has hired an investment bank to identify potential buyers of its 54,000 barrel-a-day refinery in Kapolei on the Hawaiian island of Oahu, a company official said.

Rotterdam Integrates Safety Research with LNG Training Facility

The Dutch company Falck Risc is becoming the number one expert on LNG safety in Europe. Together with the Unified Fire Department, Falck Risc will draw up guidelines

Contracts

Keystone XL Costs to Nearly Double - TransCanada

The total cost of TransCanada Corp's controversial Keystone XL pipeline is likely to nearly double following six years of regulatory delays, a company spokesman said on Friday.

Sulzer Shareholder has 5 pct Dresser-Rand Stake

Russian billionaire Viktor Vekselberg's Swiss investment firm Renova Group said on Friday it had a 4.99 percent stake in U.S.-based Dresser-Rand, which might become the object of a takeover battle.

Source: Siemens Offering $6.1 bln for Dresser Rand

Germany's Siemens plans to offer more than $6.1 billion, or $80 per share, for U.S. compressor and turbine maker Dresser-Rand, Germany's Manager Magazin said on Friday.

Finance

Deep Sea Supply takes Delivery of 'Sea Triumph'

The Deep Sea Supply  took delivery of the newbuilding Platform Supply Vessel 'Sea Triumph'  on Thursday 18 September.  The vessels 'Sea Triumph' is a STX 05-L

Chevron To Find Buyers for Hawaiian Refinery

Chevron Corp has hired an investment bank to identify potential buyers of its 54,000 barrel-a-day refinery in Kapolei on the Hawaiian island of Oahu, a company official said.

Colombia's Ecopetrol Sees Recovery in 2015

Colombia's top energy company Ecopetrol is targeting production of 1 million barrels of oil equivalent per day in 2015, a steep recovery over this year, clouded

Fuels & Lubes

University of California Not to Divest from Fossil Fuels

The University of California voted on Friday to maintain its investments in fossil fuels, frustrating a student-led effort to divest its portfolio in oil, natural gas and coal.

Dann Marine Repowers With Cummins Tier 3 Engines

Dann Marine Towing, LC., is a fifth generation family owned and operated tugboat company based in Chesapeake City, MD. The model-bow twin-screw tug Sea Coast was

Russia: Exxon Still Drilling in its Arctic

ExxonMobil is still drilling in the Russian Arctic, a Russian minister said on Friday, in move that if confirmed will anger Washington after the U.S. administration

Maritime Security

Seagull Maritime Response on Safety, Security

Key areas of concern for seafarer safety and security in both marine and offshore operations have triggered the release of six new and one supplementary titles

Russia: Exxon Still Drilling in its Arctic

ExxonMobil is still drilling in the Russian Arctic, a Russian minister said on Friday, in move that if confirmed will anger Washington after the U.S. administration

USCG Cutter in Oregon Spill Drill

The crew of Coast Guard Cutter Fir, a 225-foot buoy tender homeported in Astoria, Oregon, participated in a Spilled Oil Response System exercise near Blake Island, Washington, Wednesday.

News

Deep Sea Supply takes Delivery of 'Sea Triumph'

The Deep Sea Supply  took delivery of the newbuilding Platform Supply Vessel 'Sea Triumph'  on Thursday 18 September.  The vessels 'Sea Triumph' is a STX 05-L

Tropical Storm Polo Threatens Battered Mexican Resort of Los Cabos

Tropical storm Polo barreled nearer on Friday to the Mexican Pacific resort of Los Cabos where thousands of troops were restoring order following widespread

Keystone XL Costs to Nearly Double - TransCanada

The total cost of TransCanada Corp's controversial Keystone XL pipeline is likely to nearly double following six years of regulatory delays, a company spokesman said on Friday.

People in the News

Dann Marine Repowers With Cummins Tier 3 Engines

Dann Marine Towing, LC., is a fifth generation family owned and operated tugboat company based in Chesapeake City, MD. The model-bow twin-screw tug Sea Coast was

Source: Siemens Offering $6.1 bln for Dresser Rand

Germany's Siemens plans to offer more than $6.1 billion, or $80 per share, for U.S. compressor and turbine maker Dresser-Rand, Germany's Manager Magazin said on Friday.

Exxon, Rosneft May Halt Arctic Operations

Russia's natural resources minister said on Friday that it was highly likely that U.S. oil major Exxon Mobil Corp and its Russian counterpart Rosneft had halted

 
 
Maritime Security Maritime Standards Naval Architecture Navigation Offshore Oil Salvage Ship Repair Ship Simulators Shipbuilding / Vessel Construction Sonar
rss | archive | history | articles | privacy | terms and conditions | contributors | top maritime news | about us | copyright | maritime magazines
maritime security news | shipbuilding news | maritime industry | shipping news | maritime reporting | workboats news | ship design | maritime business

Time taken: 0.1697 sec (6 req/sec)