KN Energies signs contract with FSRU Independence operator Hoegh LNG Klaipėda

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The international operator of energy terminals KN Energies (KN) signed a contract with Hoegh LNG Klaipėda, according to which this company becomes the technical operator of the floating storage and regasification unit (FSRU) Independence of the country’s strategically important liquefied natural gas (LNG) terminal.

Hoegh LNG Klaipėda won the tender of the technical operator of the Independence last year, beating two international shipping companies. The newly concluded contract reflects the changed responsibilities of the parties: KN Energies becomes the owner of the vessel, and Hoegh LNG Klaipėda – the technical operator of the FSRU.

According to the contract, Hoegh LNG Klaipėda has been entrusted with the technical operations and maintenance of the FSRU for five years, with the possibility of extending the cooperation for another five years.

“Since the geopolitical situation has changed, the last couple of years have clearly shown that the Klaipėda LNG terminal is not only the main source of gas supply for Lithuania but also an infrastructure of regional importance, ensuring gas supply to other countries as well,” said Darius Šilenskis, CEO of KN Energies. “With the signed contract, we are implementing the decision taken by the Lithuanian state to purchase an FSRU and to ensure its continuous operation after the end of the lease contract. I am sure that by choosing a reliable partner with many years of experience in the operation of FSRUs, we will be able to smoothly take over the ownership of the vessel and ensure the safe and reliable operation of the terminal.”

The maximum service provision period stipulated in the contract covers ten years and the maximum amount of the contract that can be used for this period is 225 million euros. It consists of fixed and variable operating costs of the FSRU.

After taking over the ownership of the FSRU Independence and ensuring its operation with an external service, the price of the services for the terminal users will not change substantially. In the years 2025-2033, the forecasted average regasification rate is 1.77 euros/megawatt-hours (MWh) and is lower than the rate approved in 2024 (1.83 euros/MWh).

After establishing the cost-based pricing of the LNG terminal and allocating capacity for the long term in 2022, the Klaipėda LNG terminal collects about half of its income from customers abroad, which for the second year in a row determines that the KN share in the LNG security component is equal to 0.

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