June 15, 2017 [Klaipėdos Nafta AB] - The management board of KN (AB Klaipėdos Nafta), the operator of oil and liquefied natural gas (LNG) terminals, has taken decisions on the conclusion of agreements with contractors to carry out the expansion works of the light oil products’ storage tank park of the Klaipėda oil terminal and build new storage tanks. Investment in these projects is included in KN’s strategy up to 2020.
The decisions of the management board of KN are related to the following works contracts: one of them is concluded with the consortium SIA SKH and the company UAB Energetikos Remonto ir Montavimo Centras, and the other – with the companies working under the partnership agreement AB Montuotojas and UAB Hidrostatyba.
These two agreements are the first and major building works contracts of EUR 35.9 million second stage investments in the expansion of the light oil products’ storage tank park of the Klaipėda oil terminal.
The agreement signed with SIA SKH and UAB Energetikos Remonto ir Montavimo Centras provides for building six refined oil storage tanks, each with a capacity of 20 000 m3. The construction is estimated at nearly EUR 13.8 million.
Under the agreement signed with AB Montuotojas and UAB Hidrostatyba, the contractor will construct two 10 000 m3 tanks and four 5 000 m3 reservoirs. The cost of construction is put at almost EUR 9 million.
The both agreements provide for 10% overhead expenses for additional works, should they be necessary. The decisions of the management board will still need the approval of the general shareholder meeting.
The international public procurement procedures of these construction works were initiated in October-November last year.
According to CEO of KN Mindaugas Jusius, the main objective set by the company with respect to the oil terminal is to increase return on capital by boosting the load and storage volumes of oil products.
“KN consistently pursues its strategic goal aimed at increasing the company’s value. When the planned investments are carried out, the Klaipėda oil terminal will gain an extra competitive edge. This is highly important in maintaining and attracting new volumes of oil products to Klaipėda. Competition in the oil product market is becoming more intense. So, to maintain our competitive position we need to offer customers a wider range of services and ensure their high quality. We are already faced with the need to offer more flexibility which would enable us to load different types of oil products and store larger quantities of loaded oil products,” said CEO of KN Mindaugas Jusius.
The both projects are due to be completed in 20-22 months since the date of the signing of the agreements, which will become effective following the approval of the general shareholder meeting to be held on 4 July.
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