Lithuania’s KN seeks contractor to operate Klaipeda FSRU

Lithuania’s KN, the state-owned operator of the country’s first LNG import facility in Klaipeda, is looking for a contractor to operate and maintain the 170,000-cbm FSRU Independence after its lease contract with Hoegh LNG ends in 2024.

KN recently exercised its option to buy Hoegh LNG’s FSRU. It will buy the unit for $153.5 million, excluding VAT.

The FSRU has a regas capacity of 3.75 bcm but there are plans to boost the capacity up to 6.25 bcm due to very high demand.

KN said on Monday it launched the public procurement for operation and maintenance services of the FSRU.

The firm said it would select the contractor with a strong focus on the experience in the operation of facilities such as the FSRU and the ability to ensure the smooth and uninterrupted operation of the LNG terminal, which is important to the energy security of the region.

When taking a decision on the procurement of the operation and maintenance services, KN consulted international experts on the optimal solution.

“Since KN is not a shipping company and has not accumulated experience in the operation of vessels and considering the overall scope of the O&M activities, it was ascertained that, at this stage, it would be far more efficient and useful to ensure the reliable operation of the LNG terminal by relying on market competences,” the firm said.

Five years

The selected contractor will be responsible for the safe and reliable operation of the FSRU, the management of the vessel’s maintenance and technical risks, and the fulfilment of environmental requirements.

Moreover, the selected contractor will also work on the compliance of the FSRU operations with the requirements of the flag sate and the vessel class, and the formation and coordination of the competent crew for the smooth operation of the FSRU during the whole contract period.

The operation and maintenance contract will last for a period of five years, with a possibility to extend it for up to five more years.

KN expects to announce the service provider by the end of the second quarter in 2023.

The contractor who wins the public procurement should ensure the O&M services as soon as the FSRU Independence passes to the ownership of KN in end-2024.

“We understand that by leveraging market expertise in the O&M of the FSRU itself, we will be able to react more flexibly and quickly and make decisions when there is a need for repairs or the need for additional crew members to ensure business continuity,” Darius Silenskis, KN CEO said in the statement.

“By hiring contractors, we will be able to manage human and financial costs of operating the FSRU more efficiently, and make more cost-effective decisions regarding its maintenance,” he said.

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