Klaipėda port authority and Klaipeda Oil ink cooperation deal

The document was signed by Eugenijus Gentvilas, port authority CEO, and Rokas Masiulis, Klaipėdos Nafta CEO.

"Klaipėdos Nafta finances the construction of the terminal's infrastructure in line with the LNG terminal law and the port's authority reimburses Klaipėdos Nafta for the funds invested. This is an ingeniously simple solution," Gentvilas said at a news conference after signing the deal.

Lithuanian Prime Minister Andrius Kubilius said after meeting with the CEOs of the port and Klaipėdos Nafta, that the government would take decisions on Monday on how to ensure a return on the port's investment over 20 years.

"The appropriate and rational decisions have been found. I want to congratulate (the port and Klaipėdos Nafta) on reaching the agreement that will allow performing work on such an important project," he said.

Gentvilas said the key issue had been how to handle two pieces of legislation, the law on the LNG terminal which was passed last month and the law on the Klaipėda port which was adopted 20 years ago, which differently treat the issue of investment in the LNG terminal's infrastructure.

The deal is necessary as Klaipėdos Nafta prepares to launch a bidding process to select a contractor for the construction of quays. Until recently, the port refused to finance the construction, saying that under the law, Klaipėdos Nafta should provide the funding.

The government says that the required investment in the quays, estimated at around 180 million litas (EUR 52.2 m), should come from gas transmission revenues and from the port's fees and charges.

The LNG terminal law provides that Klaipedos Nafta should use its own or borrowed funds to finance the development and installation of the terminal's infrastructure and that the terminal's quay should be owned by Klaipėdos Nafta. The Klaipėda port law provides that the port's authority owns all infrastructure within the port area.