1

Mantas Bartuška, General ManagerAB Klaipedos Nafta

October 18th, 2016

LNG contribution to regional gas market

Photo A. Kubaitis

2

Traditional business

50+ years of oil product terminal

operations

State fuel reserves

Klaipeda LNG terminal based on

FSRU Independence

LNG reloading and bunkering station

under construction in Klaipeda

LNG transport and bunkering vessel

project for the Baltic Sea

LNG terminal development

and Advisory services

Focus for global expansion

AB Klaipedos nafta – an oil product and LNG terminal operator

3

0

1

2

3

4

OECD32 India Rest of theWorld

Billio

n p

eo

ple

Demographics

2010 2025 2040

0

20

40

60

80

100

120

140

160

2000 2020 2040

Tri

llio

n2

01

0$

GDP

0

200

400

600

800

1.000

1.200

2000 2020 2040

Qu

ad

rillio

mn

BT

Us

Energy demand

Projections of global fundamentals indicate growth in energy demand

• World population grows 25%,

from 7.2 to 9 billion over 2014-

2040

• India has nearly 1.6 billion

people by 2040, passes China

as most populous

• Economic growth drives

increased need for energy

• Global GDP more than doubles

over 2014-2040; developing

countries lead growth

• Global demand for energy rises by

25% over 2014-2040, with all of the

growth coming from the non-OECD.

• Demand could have more than

doubled without efficiency gains

Source: The Outlook for Energy: A View to 2040. Exxon Mobile.

OECD32

China

India

Key growth

Rest of the World

Energy savings

OECD32

China

India

Key growth

Rest of the World

4

1/3of the world’s energy is

expected to be provided

by oil in 2040

40%of the growth in global

energy demand from

2014-2040 is projected to

be met by natural gas

Oil to remain primary, natural gas – to grow most

0,7% 1,6%

-0,2%0,3%

2,9%

4,8%

1,3%

-10,0%

-8,0%

-6,0%

-4,0%

-2,0%

0,0%

2,0%

4,0%

6,0%

8,0%

10,0%

0

50

100

150

200

250

Oil Gas Coal Biomass Nuclear Solar/wind/biofuels Hydro/geo

Qu

ad

rillio

ns

BT

Us

Global fuel demand in 2040 - projections

2014 2040 CAGR 2014 - 2040

Source: The Outlook for Energy: A View to 2040. Exxon Mobile.

5

0

100

200

300

400

500

600

2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

LNG demand and supply forecast until 2030 (BCMA)

LNG oversupply could be an advantage for a new market

Supply from existing facilitiesNew supply from post-FID

projects

Potential supply from

non FID projectsLNG demand

Downside potential for LNG price

Source: McKinsey & Company

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Flexible energy source for a wide range of applications

Air

N2

O2

Ar

Heat/Power Cold energyTransport

Industrial companies

District heating supply companies

Vessels

Buses/ trucks

Cars

Air separators

Food processing establishments

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AB Klaipedos Nafta plans to capture part of the energy demand growth

New LNG terminal development and advisory services:

• Operating under third party access infrastructure principles

• Single user LNG terminals feeding natural gas transmission systems

• Single user LNG to Power projects and other

• Small-scale LNG terminals/bunkering/reloading stations

Key areas where new LNG terminals are developed

New projects

Initial development

Design and procurement

Construction

Commissioning

Operations

8

LNG to power Multi-user regas terminal

Full scale LNG break-bulking hub… …can result in a regional value chain

1. 2.

3. 4.

FSRU LNG terminal Gas power plant TPA FSRU LNG terminalTPA gas transmission

system

TPA gas transmission

system

FSRU LNG terminal

LNG bunkering/distribution

vessel

FSRU LNG terminal TPA gas transmission

system

LNG bunkering/distribution

vessel

LNG

LNG

LNG

LNG

L

N

G

LNG

LNG

LNG

LNG

LNGLNG

LNG small scale value chain

New LNG terminals have significant impact on regional markets

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Energy security for the Baltics states and for Finland/Poland1.

Break-bulking possibilities for new small-scale LNG markets4.

Opportunity for market players to import gas from the global

market2.

Diversified supplies and entrance to new regas markets3.

Klaipeda LNG terminal – a regional game changer in the Baltics

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Klaipeda LNG terminal in some periods reach around 90% capacity utilisation

Regasified volumes

-

1.000.000

2.000.000

3.000.000

4.000.000

5.000.000

6.000.000

7.000.000

January March May July September November

Ave

rage

Nm

3/

day

2015

2016 Confirmed

LNGT Annual

Schedule

2016

2016 KN preliminary

forecast

2015 regasified

volume

Unused

capacity

Third Party Access infrastructure

> 330% YOY increase in regasified volume

Spot cargos

11

Gate

Risavika

Ora

LysekilNyneshamn

Swinoujscie

PoriGavle

Ust-Luga

Tornio

Gothenburg

Baltic Sea Region – full of LNG developments

Hamina

Raahe

Seagas has made its 1.000

LNG-bunker operation

• Started operations

• First ship bunkered

Ship-to-ship bunkering

Tender announced

for the construction

• Bomin Linde LNG has

signed a TCP for a LNG

bunker supply vessel

• New supplier: Koch

The world´s first LNG-

powered icebreaker

Polaris delivered

The world’s first LNG-

fueled Pure Car and

Truck Carrier was

delivered to Norway

Carnival Corporation

Signed Agreement with

Shell to Fuel World's

First LNG-Powered

Cruise Ships

First LNG bunkering trials

in Poland

LNG bunkering facilities

planned for Germany’s

Port of Lubeck

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LNG supply route

(approx. 7 km)

Klaipėda LNG terminal

LNG reloading/bunkering

station

LNG transportation

vessel FSRU Independence

LNG reloading/bunkering

station

Existing oil

product terminal

Undergoing development of small-scale LNG value chain in Klaipeda

Planned commercial operations start in H2 2017

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500 km

Current LNG consumption

Potential LNG consumption

Ferry to Karlsham

Reload station – solution for off-grid locations

Work-In-Progress:

EU funding support (around 9mln. EUR)

LNG transportation vessel

• Open season

Potential clients:

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Our strategy on LNG

Develop LNG

Terminal related

services

3

Develop small

scale infrastructure

4

Develop regional

market

5

K.Fedirka (FotoSkrydis)

Ensure alternative

source of supply

1

Effective and

efficient operation

of LNG Terminal

2

Mantas Bartuška, General ManagerAB Klaipedos Nafta

October 18th, 2016