EU backs electrification of LNG terminal with €6 million

Lithuanian liquefied natural gas (LNG) terminal operator KN Energies (KN), former Klaipedos Nafta, has confirmed the decision made by the European Union (EU) to earmark funds for the electrification of its LNG terminal on Lithuania’s Kiaulės Nugara Island.

According to KN Energies, the EU’s Modernisation fund program made a positive decision during the Investment Committee meeting to allocate support of €6 million for the Klaipėda LNG terminal electrification project.

Following the final investment decision by the firm’s management, which is preliminarily expected in the first quarter of 2025, the implementation of the electrification project is planned to take place over a three-year period.

“The objective of the project is to reduce CO2 emissions related to the operations of the Klaipėda LNG terminal, thereby lowering associated costs and improving the overall operational efficiency of Klaipėda LNG terminal. Allocation of funds will make a positive impact for the overall project financing structure,” highlighted the LNG terminal operator.

The Klaipėda LNG terminal, which has been active since 2014, with commercial activities starting a year later, is located on Lithuania’s Kiaulės Nugara Island and consists of a permanently moored FSRU Independence, built by South Korea’s HD Hyundai Heavy Industries, a 450-meter-long berth, a connecting nearly 18-kilometer long gas pipeline, and a gas metering station.

The technical operator of the FSRU is Hoegh LNG Klaipėda while KN Energies is expected to become the owner of this FSRU in December 2024. The Klaipėda terminal, which secured full occupancy until 2033, witnessed the transfer of 105,000 cubic meters of LNG a few months ago from the FSRU to the Amur River LNG vessel.

LNG is said to contribute to Europe’s climate neutrality objectives as it is considered to be a bridge fuel and an alternative for industrial and transport applications using coal or other more polluting fossil fuels.

Recently, KN Energies extended the contract with Poland’s ORLEN, enabling the latter to use the small-scale reloading station in the Baltic country for five more years.