FSRU Independence is to bear the Lithuanian flag from 2025

When KN (AB Klaipėdos nafta) takes the ownership to FSRU Independence, the vessel will be registered at the Register of Seagoing Ships of the Republic of Lithuania and the Lithuanian flag will be hoisted on board of the vessel. This decision was approved on 11 May by the Government of the Republic of Lithuania.
 
In order for the decision regarding the Lithuanian flag on board of the FSRU to be implemented, a number of legal acts related to the regulation of shipping shall have to be revised. The objective is to ensure that the applicable regulation could provide conditions for registration of FSRUs such as Independence and complied with best global practices for regulating the operations of FSRUs. 
 
The selected jurisdiction for registration of a vessel determines the shipping requirements applicable to such vessel, the tax base for seafarers on board and other requirements for the crew.
 
"Due to its strategic importance, Independence has become one of the symbols of Lithuania's energy security and energy independence, so it is only natural that the flag of the Republic of Lithuania and the registration in Lithuania would be granted to Independence upon taking over its ownership," says Dainius Kreivys, Minister of Energy.
 
‘According to standard global shipping practice, most LNG carriers and FSRUs are registered in open registers, for instance, in the Marshall Islands. Here, the regulation is relatively flexible and universal, developed over the many years of experience of the shipping companies. Considering the importance and significance of the Klaipėda LNG terminal, we are choosing a slightly more complicated, but the most acceptable path for our first FSRU "Independence", and the Lithuanian tricolour that flies on the terminal's ship best symbolizes independence", says Darius Šilenskis, CEO of CN.
 
The Government was also presented with the intention to procure the operation and maintenance (O&M) services for the FSRU. In the near future, KN will announce a public market consultation aimed at introducing the future procurement to the market participants and receiving comments and remarks from the market participants regarding the submitted drafts of the procurement documents.
 
According to Mr. Šilenskis, when deciding on the operation and maintenance of the FSRU, the key criterion was the ability to ensure uninterrupted and effective operation of the terminal, especially given the strategic significance of the infrastructure in supplying gas for the gas consumers in the region.
 
"KN has not been a shipping company before and has no experience in operating vessels. Our responsibilities include ensuring the commercial operation of such terminals, from the infrastructure running from the ship's connection to the customer or the pipeline, the berth with all its facilities, to the operation and maintenance of the pipeline and the gas metering stations. We have consulted international experts and have found that outsourcing would allow us to manage the human and financial costs of operating the vessel more efficiently, to make more cost-effective decisions on the operation and maintenance of the vessel, and finally, to be able to react more flexibly in the event of the need for additional crew members or repairs. Taking this into account, we have assessed that by leveraging market expertise for the operation and maintenance of the storage vessel at this stage, we will be able to ensure the reliable operation of the LNG terminal in a much more efficient and beneficial way, while also accumulating the necessary experience should KN decide to take on such activities independently in the future," says Mr Šilenskis.
 
The public consultation is expected to be launched in Q2 of this year and the international procurement of the service initiated in Q3 2022.
 
The ownership to FSRU will be transferred to KN at the end of 2024.