Correction: On 4 November 2019, the decision of the Board of AB Klaipėdos nafta (hereinafter – the Company) entered into force to acquire the liquefied natural gas (hereinafter – LNG) storage unit “Independence” currently leased by the Company or another floating liquefied natural gas storage unit (hereinafter collectively – FSRU) no later than by 31 December 2024 and to apply to the National Energy Regulatory Council with proposals for reduction of the LNG terminal security additional component to the natural gas transmission price (hereinafter – Security Component).
On 4 November 2019, the decision of the Board of AB Klaipėdos nafta (hereinafter – the Company) entered into force to acquire the liquefied natural gas (hereinafter – LNG) storage unit “Independence” currently leased by the Company or another floating liquefied natural gas storage unit (hereinafter collectively – FSRU) no later than by 31 December 2024 and to apply to the National Energy Regulatory Council with proposals for reduction of the LNG terminal security additional component to the natural gas transmission price (hereinafter – Security Component).
The acquisition of FSRU would be financed by loans and other measures. The Board adopted the decision by implementing the provisions of paragraph 6 of Article 9 of the Law of the Republic of Lithuania on the Liquefied Natural Gas Terminal (hereinafter – the Law on the LNG Terminal), based on which the LNG terminal operator, implementing the provisions of the National Energy Independence Strategy and the Law on the LNG Terminal, no later than by 31 December 2024 would acquire the title to FSRU and would become its operator. In addition, the Company’s management is committed to agree with financial institutions regarding financing for the acquisition of FSRU by the end of April 2020, and to ensure the respective state aid clearance by the end of May 2021.
The main terms of acquisition of the specific FSRU and the final decision will be approved in a separate meeting of the Board.
The Board also decided to conclude an agreement for a loan with the Nordic Investment Bank (hereinafter – NIB) on behalf of the Company, borrowing from the NIB up to EUR 135.5 mln. for a period of up to 26 years (hereinafter – the Loan for Stage I) and to provide NIB with additional securities for repayment of the Loan for Stage I with the purpose to finance the rent payable by the Company under the Time Charter Party of 2 March 2012, signed between the Company and UAB Hoegh LNG Klaipeda (previously, Höegh LNG Limited). The loan would be used for the reduction of the Security component. It is planned that Security Component could be reduced from the year 2020 approximately by EUR 27 mln., as set forth in paragraph 4 of Article 5 of the Law on the LNG Terminal.
The Loan for Stage I would be taken and used as well as Security Component would be reduced after (i) the Ministry of Finance of the Republic of Lithuania issues a permission to the Company to assume new obligations, as provided for in paragraph 13(7) of Article 3 of the Law of the Republic of Lithuania on State Debt and (ii) the state guarantee, as a security for the Loan for Stage I, is signed and entered into force. It is noted that the provision of the state guarantee has already been coordinated with the European Commission. It was notified by the Company in the notification of 22 October 2019 European Commission has published a decision on the compatible state aid.
The decision to enter into an agreement with the NIB regarding the Loan for Stage I will be approved at the General Meeting of Shareholders.
Jonas Lenkšas, Chief Financial Officer,+370 694 80594