HomeNewsPoland's Orlen signs Lithuania deal to boost LNG deliveries

Poland's Orlen signs Lithuania deal to boost LNG deliveries

9/6/2024

Polish refiner Orlen signed a five-year agreement with Lithuanian oil and gas logistics firm KN Energies for exclusive use of a waterfront LNG transshipment station in Klaipeda.

The agreement focuses on small-scale gas supply as LNG received at the station will be transported via small ships and later with trucks as opposed to oil tankers.

The gas from Klaipeda will be sent to clients in northeastern Poland and other Baltic countries such as Lithuania, Latvia, and Estonia.

“The extension of our partnership with KN Energies is a significant milestone in reinforcing our position in the Baltic region’s LNG market. While the Świnoujście terminal remains a crucial hub for our LNG operations, the Klaipėda reloading station plays a vital complementary role, allowing us to optimise the cost of logistics.Beyond serving the Polish market, the LNG sourced there is also supplied to Lithuania, Latvia and Estonia, where we are witnessing growing interest in cooperation with ORLEN,” said Ireneusz Fąfara, CEO and President of the Management Board of ORLEN.

“We believe that this agreement will flourish further cooperation with Orlen and will provide favourable conditions for even greater LNG loading volumes through the reloading station to LNG semitrailers and will create added value for our client and the entire Polish and Baltic region. Although it is a small-scale LNG terminal, it has huge potential and significance for the entire LNG value chain. We appreciate the constructive cooperation with our partners in Poland,” said Darius Šilenskis, CEO of KN Energies.

Orlen sees Lithuania as one of its strategic markets, where its subsidiary Orlen Lietuva is investing 970 MM euros ($1.1 B) aimed at improving its refining output potential, the company said in a separate press statement.

The Klaipėda reloading terminal, supplied by vessels with a capacity 30 times smaller than conventional ocean-going methane carriers, is equipped with five LNG tanks, offering a total capacity of 5,000 m3 of liquefied gas. It also features wharf infrastructure designed to handle LNG cargoes, reloading them to smaller vessels.

Beyond small-scale LNG operations, the ORLEN Group also imports large volumes of LNG through a floating terminal operated by KN Energies in Klaipėda. It has secured long-term regasification capacity, reserved until 2032,allowing it to import via the terminal over 500,000 m3y of natural gas. To date, ORLEN has received 10 cargoes, totalling approximately 656,000 metric t. After regasification, the LNG has been distributed between customers in the Baltic states and the Polish market, flowing through the Gas Interconnection Poland–Lithuania (GIPL) pipeline, operational since May 2022.

The Polish refiner is also looking at the development of Lithuanian offshore assets as it considers investing in production of "green" hydrogen as part of its renewable energy growth.

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