AB Klaipedos nafta Preliminary Revenue for the December 2020

Source: www.gulfoilandgas.com 1/8/2021, Location: Not categorized

AB Klaipedos nafta (further the Company) reviewed operating segments since the beginning of the second quarter of 2020 and presents revenue disclosures accordingly. The following operating segments of the Company are:

- Oil terminals activity, that includes Klaipeda oil terminal and Subacius oil terminal, Regulated Klaipeda LNG Terminal activity and
- Commercial LNG activity, that includes small-scale LNG reloading station in Klaipeda and international Business development projects.

The preliminary sales revenue of the Company’s oil terminals for the December 2020 comprise EUR 2.5 million and is lower by EUR 1.0 million or by 28.6 % compared to December of 2019. The preliminary sales revenue of the Company’s oil terminals for the twelve months of 2020 comprise EUR 31.3 million and is lower by 5.2 % compared to the same period of 2019.

The preliminary sales revenue of the Company’s Klaipeda LNG terminal for December 2020 comprise EUR 3.6 million (during the same month of 2019 – EUR 5.9 million). Klaipeda LNG terminal revenue from regulated activities consists of the regasification tariff fixed part (for booked annual capacities), variable part for amount of re-gasified LNG and reloading revenue. The level of Klaipeda LNG terminal revenue (for booked annual capacities) does not depend on regasification volume. Revenue is confirmed by the National Energy Regulatory Council (NERC) based on the approved methodology of State regulated prices in the natural gas sector and is calculated for the whole upcoming year. The preliminary sales revenue of Klaipeda LNG terminal for the twelve months of 2020 decreased by 38.8 % due to the reduction of security supplement of Klaipeda LNG terminal from the 1st January of 2020.

The preliminary sales revenue of the Company’s Commercial LNG activity for the December 2020 comprised EUR 0.2 million. If compared to the respective period of 2019, the preliminary sales revenue is higher due increase in Business development projects consultation and small-scale LNG reloading station revenue. The preliminary sales revenue of the Company’s Commercial LNG activity for the twelve months of 2020 comprised EUR 2.7 million.

Total preliminary sales revenue of the Company for the January-December 2020 amount to EUR 77.4 million and is lower by 25.6 % compared to the same period of 2019 – EUR 104.1 million.

Comment by the management of the Company:
The significant factor, which has influenced the total Company‘s revenue result in January-December, 2020, is lower revenue of Klaipeda LNG terminal, following from the KN decisions, adopted in 2019, to optimize infrastructure costs of Klaipeda LNG terminal and reduce LNG security supplement for consumers of Lithuania, starting from 2020. Due to the implementation of this decision, KN revenue for the twelve months period of 2020 is lower by 26,8 million EUR.

In 2020, KN’s oil business was affected by oil refining margins still at historic lows, geopolitical circumstances, as well as the global coronavirus pandemic, which has reduced demand for oil products worldwide and put restrictions on operation of oil refineries. Although demand for oil products has shown slight signs of recovery at the global level, the ongoing pandemic prevented faster recovery in demand for oil products in late 2020 or at the beginning of 2021. Taking into account the low oil refining margins and the lower demand for oil products due to the quarantine restrictions applied in the world, all major KN customers in Lithuania and Belarus in December handled smaller volumes. Despite unfavourable market conditions in twelve months of 2020 Company’s efforts in efficiency and flexibility to adapt to client needs helped ensuring preliminary revenues from the operation of oil terminals compared to 2019.





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