Floating LNG terminal “Independence” sails into Klaipėda

Energy Minister Masiulis and President Grybauskaitė at LNG terminal's welcoming ceremony
DELFI / Šarūnas Mažeika

The Korean-made vessel, aptly named “The Independence”, appeared near Klaipėda shortly after 8 AM local time.

The vessel measures 294 metres in length, 46 metres in width and 47 metres in height. Her speed is 18 knots. A total of 25,000 tonnes of steel were used for her construction. The vessel has 4 LNG storage tanks of a total capacity of 170,000 cubic metres.

The official welcoming ceremony in Lithuania’s western Baltic port on Monday afternoon is attended by Lithuanian leaders, Estonian Foreign Trade and Entrepreneurship Minister Anne Sulling, Latvian Prime Minister Lamdota Straujuma as well as delegates from the US Senate, Norway, Finland, Sweden, the European Commission.

The floating LNG terminal will solve two key energy problems of the country, i.e., dependence on the imports of gas and electricity, Energy Minister Rokas Masiulis said on Monday.

The LNG facility would solve those problems since the country has large power plants generating electricity from gas, Rokas Masiulis said.

“With one vessel we can solve two major issues: gas and electricity,” he said at an energy conference in Klaipėda on Monday morning.

The FSRU means energy independence both for Lithuania and for Estonia and Latvia, the minister said.

“This energy independence can be shared. Since we are connected with Latvia and Estonia, we can share our energy and our neighbors can share benefits… Not only Lithuania gained energy independence but, partially, our neighbors, too,” Masiulis said.

Meanwhile, Amos J.Hochstein, Acting Special Envoy and Coordinator for International Energy Affairs leading the Bureau of Energy Resources at the US Department of State, warned that gas was not enough to solve all problems. He said, however, that now Lithuania would be part of the global gas market, which was an important milestone.

He noted that the Baltic countries needed an alternative. “The highest bidder gets the gas. But it’s about markets.”

The opening of the LNG facility was an important milestone in particular as Lithuania, Latvia and Estonia were an energy island several years ago, Hochstein said at the conference.

“That’s why we’ve been inspired by what Lithuania’s done,” he said.

Paying off even before launch

“I am very excited, the heart is beating harder, because so much work went into this,” Minister Masiulis said before the terminal’s arrival in Klaipėda.

According to him, energy consumers in Lithuania can feel the benefits even before the LNG terminal is launched, since Russia’s gas behemoth Gazprom, until now Lithuania’s only supplier, has cut gas prices for Lithuania 20 percent.

“This has made up for the costs of constructing the terminal four-fold,” according to Masiulis, adding that if Gazprom had not cut the price, the surcharge would have been four times the LNG terminal’s construction costs.

State-run company Klaipėdos Nafta (Klaipėda Oil) invested EUR 100m into the terminal, while Klaipėda Seaport Authority contributed about EUR 38m. The terminal’s jetty, which cost EUR 35m, was constructed by Latvia’s BMGS, while PPS Pipeline Systems is finishing a EUR 33m pipeline extension.

Lithuania has signed a five-year contract with Norway’s Statoil to supply minimum LNG volumes – 0.54bn cubic metres per year – to ensure the terminal’s smooth operation.

In its energy security strategy drafted last May, the European Commission says that Klaipėda’s terminal is the only realistic solution to diversify the Baltic countries’ gas supply in the short term.

EC vice-president: Lithuania shows how to respond to energy challenges

Vice-President of the European Commission Günther H. Oettinger said on Monday: “Today’s event at Klaipėda LNG terminal marks an important milestone by Lithuania to diversify its gas supply sources, ensure competitive gas prices and security of gas supply in the country and the Baltic States region.

“Klaipeda is of strategic importance. I warmly congratulate the Lithuanian authorities and the project promoter of the LNG terminal for having completed its implementation right on schedule. The development of the project and the start of its operation can truly be considered a success story for Lithuania.

“Moreover, the long-term funding received from the European Investment Bank for the construction and operation of the facility show how EIB loans can help ensure the timely implementation of energy infrastructure projects. The challenges that Europe faces today in terms of security of gas supply require a quick response, and Lithuania has shown how this can be delivered. In the coming years, LNG will be an important element of flexibility and we need to better use our existing and future regasification capacities.”

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