Lithuanian LNG terminal, even despite the fact that it is a facility of a nature, which significantly differs from the terminal that is being constructed in Świnoujście (not to mention the ownership structure of both facilities, which is also considerably different), is often compared to the Polish infrastructure, and presented as a symbol of success. However, the on-time handing-off of the Klaipėda facility does not mean that its functioning is trouble-free.
Lithuanian terminal not connected to the gas distribution network?
Above all, we do not really know it now, whether the leased floating storage and regasification unit (so called FSRU, also known as an LNG terminal) is connected to a fixed pipeline which is attached to the local gas infrastructure (which is a fundamental issue when it comes to safety and operation of the facility).
Back in October last year, Lithuanian former Minister of Economy, Eugenijus Gentvilas informed that the German PPS Pipeline Systems GmbH company encountered some problems in the process of creating a fixed connector. Due to these reasons the company might have had to face financial penalties. It also seemed possible that the PPS firm would withdraw from the whole investment. Gentvilas additionally suggested that the terminal opening ceremony, which had involved the Lithuanian politicians, was only possible thanks to the fact that a provisional pipeline had been created before. This pipeline was quite sensitive to the weather conditions.
On 3rd December 2014 – 1.5 months after Gentvilas had made his statement – the Lithuanian 15min.lt outlet, quoting a representative of the Klaipedos Nafta company, which is responsible for management of the FSRU informed that operation of the LNG terminal at the time was possible only thanks to the temporary pipeline. The infrastructure in its final shape is to be handed off for use in the second quarter of 2015.
It seems then, that the floating storage and regasification unit has been handed-off for use, even though it is not fully operational. We cannot state it clearly, however it is worth noting that – starting from the moment when the sensational information was published by the 15min.lt outlet – the Lithuanians are constructing their press releases in a way, in which they would not be related directly to the issue of the above-described connector.
Rural location of the terminal has an impact on its profitability
Realistic transfer capacity of the FSRU (which is dependent by the quality of the connecting pipeline) will be probably revealed in the nearest future. It is worth to mention it here, within that context, that the Klaipėda terminal should start to deliver the gas to Estonia, starting from 1st March 2015. A proper media publicity, related to this issue, has been created. Here we can speak of quantities close to 30 million cubic meters, which are to be achieved until the end of the year. These values are not really impressive to be honest. If we look at all that more closely, two conclusions may be created:
Constructing a land LNG terminal – the floating unit is not enough
The above-listed problems force the Lithuanian authorities to optimize the key investment, aim of which is to make Lithuania independent from the Russian gas supplies.
Lack of confidence in the Latvian export policy is probably a reason why a decision has been made to create the second, land-based LNG terminal, with a storage capacity of 5 thousand cubic meters, which is to play an auxiliary role, in relation to the floating storage and regasification unit. Here, I mean supplying gas to LNG carriers, train tanks and tank trucks.
When one considers this issue, looking at it from the Polish point of view, one could state that it would be better to create a single facility, but in a proper way. Particularly because oof the fact that a floating LNG terminal may be troublesome, especially for the harbour where it is staying.
Safety issues and the Port of Klaipėda
At the end of January this year, Lithuanian 15min.lt website, described the problems related to safety of the FSRU, which is stationed at the Port of Klaipėda:
A week after the article describing the above-mentioned issues had been published, a bomb threat call was made, regarding the Lithuanian terminal. The described issue shows, how big is the challenge related to provision of safety for a floating regasification unit, which is anchored in a commercial port, where there is a lot of ship-traffic.
Lithuanian LNG Terminal – a perfect investment?
The problems faced by the Lithuanian LNG terminal lead to a lot of questions. The most important one, within the Polish context, is: was the investment carried out perfectly?
In my opinion, the problems related to the FSRU-dedicated pipeline, a need of creating a land facility, security problems and tough macroeconomic environment, which was not taken into account when the initiative was pushed towards realisation, show that the “Independence” cannot be considered to become a role model for the Świnoujście terminal.