Lithuania's KN Bids for LNG Terminal Operator in Brazil

Maritime Activity Reports, Inc.

October 9, 2019

Image: Klaipedos nafta

Image: Klaipedos nafta

Lithuania's state-run oil and LNG terminal operator Klaipedos Nafta (Klaipedos Oil, KN) said on Wednesday it’s currently negotiating an operations and maintenance services agreement for a LNG terminal in Brazil with Brazils' Gas Natural Acu (GNA).

Under such Agreement KN may commit to incorporate a company in Brazil (hereinafter – Brazilian  SPV) for the provision of such services.

For that reason, KN may need to give a guarantee or guarantees to secure the fulfillment of obligations of the Brazilian SPV to GNA (or its legal successor) under the Agreement for the validity period of the Agreement (issuing a guarantee or guarantees for the entire period of the Agreement or issuing separate guarantees for relevant shorter periods).

"Productive negotiations are underway with GNA over the provision of terminal operator services," KN acting CEO Darius Silenskis said in the statement. "It's too early to estimate when the agreement might be reached but we are putting every effort to secure it and are making preparations in advance to be able to immediately focus on the provision of services to the new client, if successful."

It is  established that a guarantee or guarantees of KN can be given both as a direct guarantee of KN to GNA (or its legal successor) for the obligations of the Brazilian SPV, and indirectly – KN guaranteeing (also depositing cash or securing in any other way) the fulfillment of obligations of the Brazilian SPV to third parties, which issue guarantees or give other security for fulfillment of obligations of the Brazilian SPV to GNA (or its legal successor) under the Agreement.  

 KN has previously worked with companies implementing LNG projects in Latin America. The Lithuanian company won a tender for the provision of consultation services for Cartagena Port in Colombia in 2015.

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