Procurement for the FSRU operation and maintenance services launched

KN (AB Klaipėdos Nafta), the operator of oil and liquefied natural gas (LNG) terminals, launches the public procurement for operation and maintenance (O&M) services of the LNG terminal’s vessel. The contractor will be selected with a strong focus on the experience in the operation of facilities such as the FSRU and the ability to ensure the smooth and uninterrupted operation of the LNG terminal, which is important to the energy security of the region.
 
When taking a decision on the procurement of the operation and maintenance services, KN consulted international experts on the optimal solution. Since KN is not a shipping company and has not accumulated experience in the operation of vessels and considering the overall scope of the O&M activities, it was ascertained that, at this stage, it would be far more efficient and useful to ensure the reliable operation of the LNG terminal by relying on market competences.
 
The selected contractor will be responsible for the safe and reliable operation of the FSRU, the management of the vessel’s maintenance and technical risks, the fulfilment of environmental requirements, the compliance of the FSRU operations with the requirements of the flag sate and the vessel class, and the formation and coordination of the competent crew for the smooth operation of the FSRU during the whole contract period. To manage the risks of reliable operation, safety and technical performance of the FSRU, the companies with experience in the management of the FSRU are invited to tender.
 
“Reliable and safe operations of the LNG terminal have always been our priority. However, the role of the LNG terminal is even more important now – it has become the most significant natural gas import alternative in the region, and the highest level of expertise is critical. KN strengths lie in ensuring the commercial operation of the terminals, and the technical operation and maintenance of the quay and onshore facilities. We understand that by leveraging market expertise in the O&M of the FSRU itself, we will be able to react more flexibly and quickly and make decisions when there is a need for repairs or the need for additional crew members to ensure business continuity. By hiring contractors, we will be able to manage human and financial costs of operating the FSRU more efficiently, and make more cost-effective decisions regarding its maintenance,” says Darius Šilenskis, KN CEO.
 
When launching the public procurement, it is envisaged that within the scope of the O&M services the selected contractor will plan and organise the day-to-day operation, maintenance, and repair of the FSRU, and ensure timely procurement of the necessary equipment, spare parts, and services. Following the general practice in the shipping market, tenderers are invited to submit a tender for the fixed vessel management service and fixed crew costs for the entire contract period. All other ongoing maintenance and repair costs will be planned annually and compensated to the contractor on the actual basis.
 
Before initiating the public procurement, KN conducted the public market consultation aimed at familiarising market participants with the future procurement and seeking their comments and observations regarding the submitted draft procurement documents. Considering that the procurement is complicated and complex, and seeking to ensure transparency of the tendering process, the procurement is coordinated with representatives of the Public Procurement Office, and experts from the Lithuanian Transport Safety Administration (LTSA) are also involved in the process.
 
The operation and maintenance contract will be concluded for a period of five years, with a possibility to extend it for up to five more years. The service provider is expected to be announced by the end of Q2 2023.
 
It is envisaged that the contractor who wins the public procurement should ensure the O&M services as soon as the FSRU Independence passes to the ownership of KN in end-2024.