1

2

FACILITIES IN KLAIPEDA

3

FSRU INDEPENDENCE

SINCE 2014 10

LNG RELOADING STATION

SINCE 2017 10

4

WE LEAD THE REGION TOWARD NEW BUSINESS OPPORTUNITIES

We have created the value chain of Klaipėda LNG terminal for the Baltic Sea

region, and we seek to earn maximum profit from additional activities.

In Klaipėda, KN operates a liquefied natural gas distribution station – an above ground LNG terminal operated on the third-party

access basis. It launched its activities in 2018, and it has 5 LNG tanks with the capacity of 1 000 m3 each.

LNG

RELO

AD

ING

STA

TIO

N S

ER

VIC

ES

LNG TRANSPORTATION

Reloading of liquefied natural

gas from gas carriers to the

LNG distribution station.

LNG STORAGE

Storage of liquefied natural gas

in the tanks of the LNG

distribution station.

LNG LOADING OPERATIONS

LNG loading to LNG trucks,

vessels capable to ship LNG as

cargoes and bunkering of

LNG-engined vessels.

LNG ISO TANKS

LNG can also be loaded to

standard-size tanks compliant

with ISO requirements, which

can be transported by rail or

road.

Usage of the terminal

5

6

Import of gas to Lithuania

-

2,000,000

4,000,000

6,000,000

8,000,000

10,000,000

January February March April May June July August September October November December

Booked capacity

Spare capacity

avera

ge

Nm

3/

day

2019 Approved LNGT regasification schedule + additional capacity booking forecast

2016

2015

2017

UTILIZATION OF KLAIPEDA LNG TERMINAL

2018LNG cargo delivery

Reload operation

Forecast delivery/reload

7

2019 4 4 5 7 4 5 5 42

422

Use of LNG Terminal in Klaipeda

Klaipėda LNG Terminal

2015 2016 2017 2018 2019 Prognozė

Regasif. mlrd. Nm3 0.5 1.3 1.1 0.77 1.67 1.2

Usage of the

terminal13% 35% 30% 20.5% 44.6% >30%

Terminal users >5

Users of reloading

services- - Few

Outreach markets

Reloading markets - - Few countries

LNG Reloading stattion

Users of LNG

reloading station- - Few users

Users of LNG

reloading to trucks- - >5 companies > 10 companies Few users

LNG value chain

Positive effect

9

Effect on the gas import price

10

Gas import price / Ignitis

Gazprom discount Forecast

MARKET BENEFITS BROUGHT BY THE FSRU INDEPENDENCE

– Ended the 100% reliance on monopoly supplier– Transparent third party access

mechanism

– Effective price cap– Baltic gas users have access to

international LNG markets

– Near-complete ability to supply the gas market need– Combined with Incukalns UGS for

seasonality

– Access to clients with limited size portfolios– Joint use of LNG in the terminal 11

Balticconnector

From 2020

GIPL

From 2021

FSRU Independence

4 bcm import capacity

2,3

bcm

1,3

bcm

0,5

bcm

Incukalns UGS

15

bcm

33

bcm

Poland

Ukraine

3

bcmFinland

FSRU TERMINAL ENABLED

SMALL SCALE MARKET OPPORTUNITIES TO DEVELOP

Designated supplier

Commercial gas

suppliers

Designated supplier

Commercial gas

suppliers

Small-scale break

bullking

Truck loading

Designated supplier

Commercial gas

suppliers

Small-scale break

bullking

Truck loading

Designated supplier

Bunkering and feeding

satellite terminals

Single-user LNG terminal

Multi-user LNG terminal Break-bulking LNG terminal

Full regional LNG valuechain

2015 2016 2017 2018

13

FUTURE PERSPECTIVES

Lithuanian market integrated with other Baltics and Finland

Map

Lithuanian market not integrated with any market

Lithuanian market integrated with Poland

Wholesale price

> No cross-border tariffs, Baltics and Finish prices adjust

> New price expected to be lower than Lithuanian price before

> Cross-border tariffs between Lithuania and its neighbors

> Lithuanian price remain the same, ceteris paribus

> No cross-border tariffs, Polish and Lithuanian prices adjust

> New price expected to be higher than Lithuanian price before

Risk > New import infrastructure can decrease LNG competitiveness, but chance for add. terminal low

> Other integrated markets decrease competitiveness of LNG via KN LNG terminal

> New import infrastructure can decrease LNG competitiveness without partnering

Estonia

Finland

Latvia

Lithuania

Poland

to Russia

Belarus

Estonia

Finland

Latvia

Lithuania

Poland

to Russia

Belarus

Estonia

Finland

Latvia

Lithuania

Poland

to Russia

Belarus

Market demand

> Latvian, Estonian, Finish market increase from 4 to 5 bcm/a in 2030

> Integr. market 8 bcm/a in 2030

> Lithuanian market increases from 2 to 3 bcm/a in 2030

> Polish market increases from 19 to 21 bcm/a in 2030

> Integrated market 23 bcm/a in 2030

Source Roland Berger

Integrated market development

Long term LNG supply: solution for 2044

– 2018 08 20 Decision of the Government on the long term LNG supply option with the highest benefit for LT gas consumers

– 2018 12 18 Adoption of the necessary legal amendments in the Parliament

– 2019 09 19 EC issued state aid clearance for Stage I loan (supplement reduction). Link to Stage II (purchase) established

– 2019 10 24 KN board took principal decision on FSRU purchase + decision on LNG Supplement reduction since 2020

– 2019 11 15 expected signing agreement with NIB on loan for supplement reduction

– 2019 11 28 expected State guarantee approval on the loan (for Stage I) by the Government and Parliament

– 2019 12 12 expected NIB decision on the loan for Stage II (FSRU purchase)

– 2021 04 30 expected EC state aid clearance for Stage II (FSRU purchase) loan

– 2022 12 31 expected final decisions on FSRU acquisition by the KN Board

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Cooperation options

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17

COOPERATION OPTIONS WITH EAP COUNTRIES

– Alternative large scale supply option

– Small scale supply option to off grid,

transport

– Sharing know-how on:

– terminal project development

– setting proper regulation

– O&M services, co-investment

– Promotion and employment of EU LNG

strategy

www.kn.lt