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

People & Company News

Barril Appointed COO of SBM Offshore

SBM Offshore is pleased to announce the appointment of Philippe Barril as Chief Operating Officer (COO) effective March 1, 2015.  Philippe's appointment as a

Zamakona, Finnish GS-Hydro Ink Deal

The presentation ceremony of the Finnish multinational leader in water services GS-Hydro, new partner of Zamakona Yards in Canarias was held yesterday (January 29th at 7 p.

Naval EXPO Coming to Washington

For the first time ever, the general public will be admitted free to the Naval Future Force Science and Technology EXPO general exhibit hall Feb. 4-5 where they

LNG

Tohoku Electric's LNG Buy Sets Asian Spot Level

Japanese utility Tohoku Electric has purchased an LNG cargo for delivery in the third week of March at a price in the low $7 per million British thermal unit (mmBtu) range,

Yemen Lifts Force Majeure on LNG Deliveries

Yemen on Friday lifted force majeure on liquefied natural gas (LNG) deliveries from its Balhaf plant, trading sources with knowledge of the matter said. Reuters reported last week that the 6.

Gazprom, OMV Ink Additional Deal

Vienna hosted today the signing of an Addendum to the existing contract for gas supply to Austria between Alexander Medvedev, Deputy Chairman of the Gazprom Management Committee and Gerhard Roiss,

News

5 Rescued from Sinking Vessel off Monterey Coast

Coast Guard rescued five people from a sinking 65-foot sailing vessel approximately 120 miles off the Monterey coast, Saturday. At approximately 8 a.m. Saturday,

CMA CGM Opens Two Offices

CMA CGM Opens a new branch in Constantine, (Algeria) and an agency in Sihanoukville, (Combodia) Following are the addresses in the respective countries: CMA CGM Algérie,

Barril Appointed COO of SBM Offshore

SBM Offshore is pleased to announce the appointment of Philippe Barril as Chief Operating Officer (COO) effective March 1, 2015.  Philippe's appointment as a

People in the News

Barril Appointed COO of SBM Offshore

SBM Offshore is pleased to announce the appointment of Philippe Barril as Chief Operating Officer (COO) effective March 1, 2015.  Philippe's appointment as a

Zamakona, Finnish GS-Hydro Ink Deal

The presentation ceremony of the Finnish multinational leader in water services GS-Hydro, new partner of Zamakona Yards in Canarias was held yesterday (January 29th at 7 p.

Naval EXPO Coming to Washington

For the first time ever, the general public will be admitted free to the Naval Future Force Science and Technology EXPO general exhibit hall Feb. 4-5 where they

Government Update

MMEA Recover Hijacked Tanker

A hijacked Malaysian coastal tanker has been recovered by the prompt actions of the Malaysian Maritime Enforcement Agency (MMEA) off the coast of Malaysia. The

PHA Budgets $ 275 mi for Capital Improvements

In 2015, the Port of Houston Authority has budgeted $275 million for various capital improvement projects. About $184 million is being allocated to its container

Shippers Must Monitor Greek Government Changes

Moore Stephens says shipping must monitor developments in wake of Greek government change   International accountant and shipping adviser Moore Stephens says

 
 
Maritime Careers / Shipboard Positions Maritime Contracts Maritime Security Naval Architecture Pipelines Port Authority Salvage 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: 0.1825 sec (5 req/sec)