Lithuania won approval from the European
Commission to provide 448 million euros ($606 million) in loan
guarantees and other aid to finance a liquefied natural gas terminal,
which will reduce its dependence on Russian gas.
The project, developed by Klaipedos Nafta, a
majority state-owned oil importer, could become the first LNG import
terminal on the eastern coast of the Baltic Sea if it comes online as
planned in December 2014.
"The aid will reduce Lithuania's dependence
on a single source of gas supplies and enhance its security of
supply," Joaquin Almunia, commission vice-president in charge of
competition, said in a statement on Wednesday.
"By diversifying the gas supply sources,
the terminal will also stimulate competition between gas suppliers,
which in turn will benefit consumers," he added.
The aid includes government loan guarantees
for the project and payment to Klaipedos Nafta of a fee
that Lithuania imposes on all users of its gas transmission system, the
so-called "LNG supplement".
The government introduced the fee in 2013,
and it amounts to about 17 million euros per year.Lithuania's top gas
consumer Achema, which produces fertilizers, has challenged the fee,
saying it undermines competitiveness.
The EC approval was needed to release a 87
million euro loan agreed by the European Investment Bank (EIB) in July
after Klaipedos Nafta failed to attract funding for the project from
commercial banks.
The operator will be obliged to provide
regasification services to any third party on regulated tariffs and
under non-discriminatory conditions, the Commission said.
An LNG terminal project in
neighboring Poland was delayed due to financial problems plaguing its
builders and is now expected to be completed by the end of 2014.
Klaipedos Nafta has signed an agreement to
lease a floating storage and regasification unit (FSRU) from Norway's
Hoegh LNG for 10 years, with an option to buy it later.
The vessel, which will serve as a floating
import terminal at Klaipeda port, will be able to import 2-4 billion
cubic meters of natural gas per year from 2015, though imports are
expected to be minimal in the first year.
Lithuania launched a tender to buy LNG a year ago, but no contracts have been signed yet.
Klaipedos Nafta has said the terminal needs
to import at least 0.54 bcm of gas per year to remain operational,
which amounts to six to seven standard LNG cargoes.
The Baltic state, which bought 3.3 bcm of
gas from Russia's Gazprom last year, paid one of the highest natural gas
prices in the EU, the Commission said.
Gazprom's long-term supply contract with Lithuanian gas utility Lietuvos Dujos expires in 2015.
Post to be found at:
http://www.maritime-executive.com/article/Lithuanian-LNG-Project-Gets-EU-Green-Light-2013-11-20/
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