Klaipedos Nafta AB - Notification on material event

LNG terminal capital investments compensation in 2013

Klaipėdos Nafta AB (hereinafter, the “Company”) hereby informs that the
National Control Commission for Prices and Energy (hereinafter, the
“Commission”) in its meeting of 19 October 2012 intends to consider a draft of
the investments planned by the Company into the liquefied natural gas terminal
(hereinafter, the “LNG terminal”), installation of its infrastructure and
connection. The Commission intends to publicly announce the material, related
to the above consideration on 19 October 2012. Preliminarily, by 2015 these
investments will amount to approximately LTL 453 million. 

In order to compensate the said investments, the Company is going to raise
funds from the following sources: 

(i) about LTL 250 million would be funds borrowed from Lithuanian and/or
international financial institutions; 

(ii) about LTL 200 million would be natural gas consumers' funds, i.e. revenue
from the additional and integral component to the upper limit of the natural
gas transmission price (the LNG terminal extra) in 2013 and in 2014 (the LNG
terminal extra funds collected from gas transmission tariff in 2013 would
amount to LTL 113,798 thousand). 

According to the information presented by the financial consultants of the
Company, the financial resources of the Company during the said period could
amount to about LTL 300 million. The Company could allocate these funds towards
financing the LNG terminal gas trading activities. 

Besides, the Company is going to address commercial banks for a bank guarantee
in the amount of $ 50 million intended for securing the performance of the
contract for lease of the floating storage, for a bank guarantee intended for
securing the performance of the gas supply contract, and for a bank loan
intended for formation of the working capital necessary for gas purchasing. 

Also, seeking to secure proper performance of possible financial obligations to
financial institutions, the Company has submitted an application to the
Ministry of Energy of the Republic of Lithuania, asking it to apply to the
Ministry of Finance of the Republic of Lithuania for including a limit of
guarantees intended for financing loans for investments into the LNG terminal
infrastructure (LTL 200 million), into the draft Law of the Republic of
Lithuania on Approval of the Financial Indicators of the State Budget and
Municipal Budgets for 2013. The Company notes that all the data given in this notification are preliminary
and planned, but not yet final, and may change during the implementation of the
project (if the project will be implementable). Besides, on the date of this
notification, the investment project discussed herein has not yet been approved
by the National Control Commission for Prices and Energy (as indicated, the
meeting to discuss this issue is planned for 19 October 2012), therefore,
before the approval of the project there is no guarantee that it will actually
be implementable. 

For more information about the issues on the agendas of the meetings of the
National Control Commission for Prices and Energy and resolutions taken by it,
please visit the commission's website www.regula.lt 


         Mantas Bartuška, Finance Director, 8 46 391 763