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Lithuania’s LDT buys first spot US LNG cargo

26 Jun 2017 17:40 (+01:00 GMT)
Lithuania's LDT buys first spot US LNG cargo

London, 26 June (Argus) — Lithuanian Lietuvos Energija subsidiary Lietuvos Duju Tiekimas (LDT) has bought its first spot US LNG cargo from Cheniere, which will be delivered in the second half of August.

LDT plans to store part of the 150,000m³ LNG cargo in Latvia's 2.3bn m³ Incukalns storage facility. Klaipedos Nafta director Tadas Matulionis said last month that LNG traders were enquiring about taking cargoes to Lithuania this summer for storage in Latvia, following the Latvian gas market being liberalised on 3 April. Traders were seeking to cash in on the summer-winter spread by storing gas in the summer and selling it in the winter.

The company declined to comment on the price, but said "it was competitive compared to other LNG proposals and existing pipeline gas prices."

The Lithuanian day-ahead contract averaged €19.48/MWh on the GET Baltic exchange in May, but fell to €19.30/MWh for 1-27 June. The exchange will offer a shared day-ahead product and individual month-ahead products for the Estonian, Latvian and Lithuanian market from 1 July and could add longer-term products in the future.

Spot LNG offered into Europe was around $5.25/mn Btu (€16.01/MWh).

A reduction in transmission fees to Latvia and seasonal spreads have made use of the storage facility more attractive, LDT said previously. The firm signed its first contract to supply gas to Latvia in May. It will supply Latvenergo and several Latvian companies under the contract.

Several firms had applied to purchase gas from Klaipeda to sell in Latvia before LDT's agreement, but they were denied access by Latvijas Gaze, which held a monopoly over Latvian supply until liberalisation.

The US spot LNG purchase was under a master sales agreement signed between Lietuvos Energija subsidiary Litgas and Cheniere in 2015 and future purchases are possible under the contract, LDT said. The firm has a diversified supply portfolio and is continuously evaluating LNG market opportunities, it said.

"Being a part of Lietuvos Energija Group and having the opportunity to take advantage of gained experience, we are successfully expanding our geography of acquisitions and attracting new LNG suppliers to Lithuania," chief executive Mantas Mikalajunas said.

US firm Cheniere operates the 25mn t/yr Sabine Pass facility and previously said that around 10pc of the capacity is not contracted to offtakers and it plans to sell at least one spot cargo a month from the project. Cheniere has sold a total of 19.75mn t/yr of Sabine Pass capacity under 20-year contracts to other companies, leaving it free to sell the remainder. The expected baseload production from the five planned trains is 22.5mn t/yr. Three trains are now on line. Train 4 is expected to start operating this year and train 5 in 2019. It also sells commissioning cargoes on the spot market.

In May, LDT received its first LNG cargo under a contract with US firm Koch Supply and Trading.

The 150,000m³ Grace Cosmos delivered around 140,000m³ of Norwegian LNG to Lithuania's 2.9mn t/yr Klaipeda import terminal on 26 May.

LDT plans to import a total of 2TWh, or 130,000t of LNG in two standard-sized cargoes, under a contract signed in September with Koch. The gas will be delivered by two tankers, with the second one expected to arrive in August.

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