Klaipedos Nafta and Cheniere Energy, Inc. announced that they have signed a Memorandum of Understanding (MOU) to address Klaipedos Nafta’s future natural gas needs and assess LNG purchase and supply options.
This agreement has been signed at the Embassy of the Republic of Lithuania in the United States of America.
“Today we signed an MOU with Cheniere to initiate discussions on natural gas supply options and the optimal structure under which Cheniere would be the future LNG supplier for our Klaipeda LNG receiving terminal project being designed with an initial LNG import capacity between 1.5 to 2.2 million tonnes per annum (mtpa), with expansion capabilities. Due to intensive shale gas developments, the U.S. has the potential to become a meaningful exporter of natural gas, which would not only benefit our project but our country as well, by providing a more diversified source of supply in Lithuania and boosting energy security,” said Rokas Masiulis, General Manager of Klaipedos Nafta.
“We look forward to working with Klaipedos Nafta on developing solutions for their natural gas needs in Lithuania. The U.S. is becoming recognized as a key potential source of natural gas for global markets as evidenced by the widespread interest we have received around our liquefaction project at Sabine Pass LNG. With the abundance of estimated natural gas reserves and the expectation that gas prices will remain competitive for years to come, the U.S. is positioned to become an attractive, low cost alternative supplier of natural gas for international buyers,” said Charif Souki, Chairman, President and CEO of Cheniere Energy, Inc. “We are confident that the U.S. administration and government support free trade and recognize the important role that the U.S. can play in the global energy markets. Exporting LNG to Lithuania will allow one of our allies to diversify its natural gas supply, increase its energy security and strengthen its economy. Cheniere is happy to fill this important role in the global energy markets.”
Klaipedos Nafta is in the process of building the first LNG import terminal on the Eastern Baltic coast, for use in Lithuania and potentially for export to its Baltic region neighbors. Lithuania intends to become one of the first European countries to implement the European Union’s Third Package of energy market reforms, which would result in the creation of a free and open energy market similar to what now exists in the U.S. The development of the Klaipeda LNG terminal is a critical component in the plan to open the energy markets in the Baltic region.
Subject to the terms and conditions of the MOU, Cheniere and Klaipedos Nafta have agreed to proceed with negotiations to discuss various LNG supply structures, which if successful, would lead to negotiations of a long term LNG purchase and supply agreement or similar type agreement.
Source: Cheniere, May 12, 2011;