A Lithuania reloading station is supporting LNG use for heavy vehicle transport and marine bunkering
Small-scale LNG is gaining momentum in Lithuania, underpinned by the country’s National Energy and Climate Action Plan 2021-2030. Approved in 2019, the plan contains measures to promote the development of LNG refuelling stations and supports the development of LNG-powered vehicle and marine transport.
The 2020 Climate Change Programme has funding of €35M (US$38M) to subsidise the use of more sustainable fuels in national transport, from which €20M (US$21M) is earmarked for public transport and €15M (US$16M) for transportation and fuelling stations.
To support this growth, Klaipedos Nafta (KN), operator of the Klaipėda LNG terminal in Lithuania, has been trying to strengthen its status as a small-scale LNG regional hub in the Baltic Sea. The terminal uses the floating storage and regasification unit (FSRU) Independence, which has a regas capacity of 10.3M m3 of natural gas per day and a storage capacity of 170,000 m3. Connected to Lithuania’s natural gas distribution network via an 18-km pipeline, the FSRU has the ability to receive and transfer cargoes from LNG carriers.
Owned by Höegh LNG, 2014-built Independence is operating at the Klaipėda LNG terminal in Lithuania under a charter to KN. In March, KN inked a 25-year loan agreement with Nordic Investment Bank to secure financing up to €160M (US$174M) to purchase Independence.
“PGNiG plans to develop the market for LNG in Lithuania, Latvia and Estonia”
In conjunction with the LNG terminal, KN operates a reloading station located near the gate of Klaipėda port that began operations in October 2017. With five 1,000-m3 LNG storage tanks, the reloading station can fill two LNG tanker trucks and a small volume LNG vessel simultaneously.
Advancing its small-scale LNG hub strategy, KN has signed a five-year agreement with Polish oil and gas company PGNiG for 100% of the capacity of the Klaipėda LNG reloading station. PGNiG commenced operations in April at KN’s small-scale LNG terminal, which can accept small LNG cargoes, bunker vessels and load tanker trucks. Vessels can also be refuelled via tanker truck.
“We are positive that co-operation between KN and PGNiG will significantly strengthen the regional small-scale LNG market,” said Klaipėdos Nafta chief executive Darius Šilenskis, who sees opportunities to provide LNG to customers in Baltic States, northeastern Poland and central and eastern Europe.
Regional LNG demand is supporting growth at the KN-operated reloading station, which experienced a 45% growth in volume year-on-year between 2018 and 2019. During the two years of operation, 12 companies from Lithuania, Estonia and Poland have used the LNG reloading station for filling of their LNG trucks. From the start of operations, 44,000 m3 of LNG has been delivered by small-scale gas carriers to the reloading station.
To support refuelling of LNG heavy road vehicles, Poland currently has eight LNG refuelling stations, two of which were opened in 2020. There is also a significant increase in the number of LNG regasification stations in off-grid locations.
Already a supplier of LNG to customers in the Czech Republic and Germany, PGNiG plans to leverage its experience in small-scale LNG trading and operations to develop the market for this fuel in Lithuania, Latvia and Estonia.
The nearest competitor to the KN LNG terminal is Poland’s Swinoujscie LNG terminal, about 475 km away on the Baltic coast. Swinoujscie LNG terminal is in the process of expanding its capacity to 5.4 mta by 2021 with its connection to the Baltic Pipe project. The pipeline will bring gas from Norway to Poland, capitalising on higher gas demand in central Europe and lessening the region’s dependence on Russian gas.