JSC Virši-A acquires 20% of shares in JSC Skulte LNG Terminal

Today, May 20, the largest and fastest growing domestic fuel trader and local energy company JSC Virši-A has signed an agreement with JSC Skulte LNG Terminal to acquire 20% of its shares and announces plans to jointly develop a liquefied natural gas (LNG) terminal at the port of Skulte. The development of this project will increase the energy security of Latvia and the Baltic region and will contribute significantly to the diversification of natural gas supplies and the further development of the natural gas market.

 

"The LNG terminal is a matter of Latvia's energy independence, and Virši, as a locally owned energy company, wants to contribute to the diversification of the country's energy supply routes. "Participation of Virši in the development of the Skulte project is a well-considered step towards achieving the strategic goal of becoming also an energy company. We have studied in depth the location and financial model of the LNG terminal and concluded that it is the most cost-effective and functional natural gas import route in the Baltics, which is why we have decided to support the development of this infrastructure facility by participating in the project as a shareholder. We are confident that the consumers and businesses of Latvia will benefit from the successful implementation of this project," emphasizes Jānis Vība, Chairman of the Board and CEO of AS Virši-A.

 

"We are very pleased with the involvement of Virši in the Skulte project as a leading national capital energy company. It is a strong confirmation of the Skulte terminal's position on the region's energy map, allowing us to offer natural gas at attractive prices to consumers and businesses. "The experience, capacity and capability of Virši as a local partner will contribute to a faster implementation of the terminal project. JSC Skulte LNG Terminal is also continuing negotiations with a pre-selected group of foreign industrial investors on the implementation of the project on the most favorable terms for the Latvian market," says Renārs Miķelsons, General Manager of Skulte LNG Terminal.


"We at Virši have have researched and developed various energy solutions and have concluded that the consumption of methane in the region, including in the form of biomethane and natural gas as a transitional energy carrier, has a good outlook in the next ten years. This trend will continue for industrial users, households and the transport sector. The LNG terminal in Skulte as an infrastructure facility in combination with the Inčukalns underground natural gas storage facility is an excellent tandem not only for supplying Latvian consumption, but also for creating competitive natural gas supplies for the wider region, which includes the Baltic States as well as Finland and Poland," explains Jānis Vība.


The Skulte LNG terminal project has unique geographical, economic and technological advantages. The Skulte project requires 34 kilometers of direct pipeline connection to the Inčukalns underground gas storage facility and does not require investment in LNG storage infrastructure, which typically accounts for 70-80% of a terminal's investment.

 

Virši announced its strategic goal of growing into also an energy company more than a year ago, becoming an energy trader actively using local green energy resources. Since April 2021, Virši has been offering electricity trading services to the business segment, thus being one of the few market players to successfully combine the opportunities to purchase several energy resources. Gradually strengthening its position in the electricity market, Virši currently supplies electricity to more than 300 connection points throughout Latvia.

 

JSC VIRŠI-A shares are admitted to trading on Nasdaq Baltic First North Market.

 

JSC VIRŠI-A is the largest and fastest growing domestic fuel trader, with 27 years of experience in the Latvian fuel trade sector. Today, the JSC VIRŠI-A network has more than 66 service stations, of which 65 are full-service, and the company employs more than 640 people across all regions of Latvia.

JSC "Skulte LNG Terminal" submits an offer to the Latvian government for the construction of an LNG terminal

 

In order to stop the import of Russian natural gas, it is necessary to build another liquefied natural gas (LNG) import terminal in the Baltic region. The location of Skulte in the immediate vicinity of Inčukalns UGS ensures the lowest possible construction costs and the most efficient operation of the terminal. It is not necessary to build LNG storage tanks in Skulte, Inčukalns UGS will be used instead. The capacity of the Skulte terminal will be sufficient to supply gas to Latvian, Estonian and Finnish consumers.

 

JSC "Skulte LNG Terminal" has submitted a cooperation offer to the Latvian government for the construction of the LNG terminal. The offer envisages a government decision on granting the status of an object of national interest to the project, as well as an opportunity for other countries in the Baltic region to participate in the project.

 

JSC "Skulte LNG Terminal" is a private commercial company, which in cooperation with industrial investors offers to build a liquefied natural gas import terminal in the Skulte port water area, with a direct pipeline connection to the Inčukalns underground gas storage.

 

Skulte LNG Terminal Project Included in Latvia’s Priority Project List of the Three Seas Initiative

Pursuant to the decision of the Latvian government, the Skulte Liquefied Natural Gas Terminal project has been designated as one of the priority projects of Latvia regarding the attraction of funding under the Three Seas Initiative.

 

Founded in 2016, the Three Seas Initiative is a regional economic co-operation platform designed to implement physical infrastructure projects to bridge the north-south connectivity gaps in the energy, transport infrastructure, and digital communications sectors of the European Union. The investment fund established under the initiative will operate in 12 EU member states. Latvia is represented by the Development Finance Institution Altum, and the management of the fund is entrusted to the US-based investment company Amber Infrastructure Group. The USA, as a partner country, has planned to provide a significant contribution to the Three Seas Initiative Fund. The total amount of funding that will be available within the framework of the fund is estimated to be EUR 3 - 5 billion.

 

The Latvia-based company JSC Skulte LNG Terminal is developing the Skulte liquefied natural gas terminal project. An application which would see the project designated as a project of European common interest has been submitted and, like the project for the construction of the pipeline connecting the Skulte terminal and the Inčukalns underground natural gas storage (UGS), which was submitted by JSC Conexus Baltic Grid, it is included in the Ten-Year Network Development Plan of the European Gas Infrastructure Plan. The project is currently undergoing an environmental impact assessment and is expected to be completed by the end of 2024.

 

It is not necessary to build liquefied natural gas storage tanks for the Skulte LNG terminal, since the Inčukalns underground natural gas storage will be used for this purpose. As a result, the costs of the Skulte terminal will be 70-80% lower compared to terminals of similar capacity (for instance, in Klaipeda, Lithuania), and end consumers will be able to receive cheaper natural gas at the Skulte terminal.

 

The JSC Skulte LNG Terminal project has aroused considerable interest among potential suppliers and buyers of LNG; the project is expected to play a significant role in the common Latvian, Estonian, and Finnish natural gas trading area, which was established in 2020 after the abolition of cross-border tariffs and the construction of the Balticconnector gas pipeline that connects Finland and Estonia. The project will promote the diversity and flexibility of energy supplies and reduce the risks associated with using energy supply routes controlled by Russia. The implementation of the project will attract a significant amount of foreign investment to Latvia, create new jobs, and contribute to the Latvian economy.

Contacts

JSC Skulte LNG Terminal

Address: Dzirnavu iela 36, Rīga, LV-1010
Reg. code: 40103976384
VAT code: LV40103976384
tel.: +371 29 452 558

+371 29 151 050
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