AB Klaipedos nafta, legal entity code 110648893, address of the registered office Buriu st. 19, Klaipeda (hereinafter - the Company or KN), is an issuer of securities and publishes inside information in accordance with the procedure established in the Listing Rules of AB Nasdaq Vilnius and in accordance with the principles established in the Corporate Governance Code for the Companies Listed on Nasdaq Vilnius, as well as taking into account other legal acts applicable to the Company.
In order to ensure that reliable, accurate and clear information is promptly disclosed to investors and that all shareholders have equal access to the information required by law, the Company hereby informs that it has received the questions submitted in advance by the Company's shareholders regarding the agenda of Extraordinary General Meeting of Shareholders convened on 25th February 2022 at 1:00 p.m. In accordance with Paragraph 1 of Article 161 of the Law on Companies, we provide answers to the shareholders' questions received in advance to all shareholders of the Company at once:
- What would be the financial impact of acquiring a smaller FSRU that is cheaper to maintain?
The submitted question is not related to the agenda item of the General Meeting of Shareholders to be convened on 25th February 2022.
The Company reminds that the results of the market research, market consultations and the public tender have clearly shown that the acquisition of the existing Floating Storage Regasification Unit (hereinafter - FSRU) "Independence" (hereinafter - FSRU Independence) by exercising the purchase option is the most economically advantageous solution for acquiring an FSRU. This was also determined by the National Energy Regulatory Council in the certificate No. O5E-1627 of 31 December 2021 "Regarding the coordination of an Investment project of AB "Klaipedos nafta" "Acquisition of an LNG storage-vessel"".
- Please provide the shareholders with all the "<…> other terms and conditions specified in the Time Charter Party" set out in clause 2.6 of the draft decisions?
In accordance with Paragraph 4 of Article 161 of the Law on Companies, Guidelines for Information Classification and Management as well as Confidential Information and Commercial.
- Which existing or potential users of the Klaipeda LNG terminal have been contacted regarding the size and technical parameters of the LNG storage-vessel?
The submitted question is not related to the agenda item of the General Meeting of Shareholders to be convened on 25th February 2022.
As it was already provided in the Information Notice (see reference in answer 2), in order to determine the most appropriate size and technical parameters of the acquired FSRU, the Company conducted a market research together with a market sounding (potential FSRU suppliers and existing and potential terminal users), market consultations on procurement documentation and public procurement.
- Please substantiate to the shareholders the assumptions of AB Klaipedos nafta provided to the National Energy Regulatory Council without any arguments that:
- Gas consumption in the FINESTLAT market is supposed to increase;
- The Polish Ostroleka power plant should use gas from the Klaipeda terminal, although Poland itself has its own terminal;
- The amount of free ETS allocated will not change, although it is decreasing;
- According to the Certificate of AB Klaipedos nafta, it is written about the common market of the Baltics and other countries, although it does not exist, as the issues of gas tariff entry and exit to Lithuania, its duplication and maintenance of the LNG terminal, being used by entities of other countries, have not been resolved politically;
-Virtually no figures for the assumptions are provided, so please provide them to shareholders.
The submitted question is not related to the agenda item of the General Meeting of Shareholders to be convened on 25th February 2022.
The Company notes that following the National Energy Regulatory Council's examination of the material submitted by the Company, it has been ruled in the certificate No. O5E-1627 of 31 December 2021 that the Company had provided all required documents. Accordingly, an investment project "Acquisition of an LNG storage-vessel" submitted by the Company was approved by resolution No. O3E-13 of 7 January 2022.
- Why does AB Klaipedos nafta not plan to manage the acquired FSRU itself, which will lead to further costs to be incurred, if AB Klaipedos nafta declares that it has accumulated allegedly extensive experience in implementing such projects in South America (Brazil, Colombia)?
The submitted question is not related to the agenda item of the General Meeting of Shareholders to be convened on 25th February 2022.
According to KN 2030 strategy), the Company currently specializes in the operation and maintenance of onshore LNG infrastructure, but not in the operation and maintenance of FSRU as such.
In both Lithuania and Brazil the Company as the operator is responsible for the smooth operation of the LNG terminal, including the commercial, technical and logistical operation of the installation on the quay and on it, gas pipeline and gas metering stations as well as development of other related processes and systems. The operation and maintenance of FSRU requires competencies other than those objectively available to the Company and prioritized in the strategy. Please note that following the acquisition of FSRU Independence, costs for her continued operation and maintenance will be incurred in any case, regardless of whether these services are provided by the Company itself or by hired professional service provider. When making a decision on ensuring the operation and maintenance of the acquired FSRU Independence, the Company will assess both the economic and security as well as the risk-taking aspects.
- Why will the full acquisition of the existing LNG storage-vessel "Independence" cost around 881 mln. EUR, i. e. several times more than usual in the world for similar projects of this size?
The Company notes that a draft decision is being submitted to the General Meeting of Shareholders regarding the title acquisition of the FSRU Independence for the specified price of USD 153,5 mln., excluding value-added tax.
Chief Commercial Officer Mindaugas Navikas
m.navikas@kn.lt, +37068649814
