The Nordic Investment Bank (NIB) and Lithuanian liquefied natural gas (LNG) and oil terminal operator AB Klaipėdos Nafta (KN) have signed a 25-year loan agreement to finance the purchase of a floating storage regasification unit (FSRU) for LNG operations.
Currently, the FSRU used for LNG import to Lithuania is leased on a ten-year arrangement. NIB’s loan will finance the acquisition of the most economically viable FSRU at the end of 2024, once the current lease and service agreement expires. Provided financing is up to EUR 160 million.
“NIB’s financing will secure a long-term independent natural gas supply to Lithuania and the Baltic markets”, says Henrik Normann, NIB President & CEO.
KN expects that gas will remain an important energy resource for Lithuania’s transition to a low-carbon economy by 2050. The decision of acquiring the FSRU is supported by analysts, forecasting stable natural gas consumption in the country in the upcoming decades as well as extended opportunities brought by ongoing regional gas infrastructure projects.
“As the energy market undergoes transformation and search for solutions to reduce environmental impacts, we have an advanced gas supply infrastructure in Klaipėda that can meet current and future needs of gas consumers in the Baltic Sea region and Central Europe. We see Klaipėda LNG terminal as an innovative service center that creates added value for the businesses in their transition to the green economy”, says Darius Šilenskis, KN CEO.
At the end of 2019, NIB granted KN a loan of EUR 134.1 million to partly cover the operating lease payments and enable equalised tariff levels to be maintained throughout the full lifetime of the terminal, both before and after a chosen FSRU is acquired. As with the current agreement, the decision to finance LNG terminal was based on its strategic importance for Lithuania. Overall, this is NIB’s fourth loan agreement with KN.
KN is an LNG and oil terminals operator, which ensures safe, reliable and efficient access to global energy markets for its customers by sustainable development, investment and operation of multi-functional terminals worldwide.
NIB is an international financial institution owned by eight member countries: Denmark, Estonia, Finland, Iceland, Latvia, Lithuania, Norway and Sweden. The Bank finances private and public projects in and outside the member countries. NIB has the highest possible credit rating, AAA/Aaa, with the leading rating agencies Standard & Poor’s and Moody’s.