Poland Opens Long-Awaited LNG Terminal to End Russian Dependence

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October 12, 2015


By Marek Strzelecki

(Bloomberg) — Thirteen days before Poland’s general election, Prime Minister Ewa Kopacz opened the nation’s first terminal to import liquefied natural gas and promised “full independence” from Russian gas supplies from next year.

The facility is ready for startup tests and will get a first shipment of LNG from Qatar between Dec. 11 and Dec. 17 to cool the plant, with commercial deliveries starting in 2016, two years later than initially planned. Poland, a key transit country for Russian gas supplies to western Europe, has criticized plans by Gazprom PJSC to expand its undersea pipeline directly to Germany, which bypasses east European countries that rely on Russia for their energy.

“Next year, we’ll be fully independent from supplies from the east,” Kopacz told reporters at the terminal’s site in the Baltic port of Swinoujscie, near the German border.

Poland plans to expand its gas grid to enable the transport of fuel from Swinoujscie to its neighbors in the Czech Republic, Slovakia, Ukraine and Lithuania. That would also allow it to boost the use of the terminal, which currently only has supply agreements for 30 percent of its capacity.

The Law & Justice opposition party, which leads opinion polls ahead of the Oct. 25 election, said the terminal wasn’t ready and that Kopacz was staging a “show” to woo voters.

Polskie Gornictwo Naftowe i Gazownictwo SA, the nation’s Poland’s dominant gas company, still has to buy a minimum of about 8.5 billion cubic meters of gas per year (300 billion cubic feet) from Gazprom under a long-term contract signed in 1996. The accord will remain in force until 2022.

Cross Border

“The prime minister is cutting a ribbon and the terminal’s construction will continue, the terminal isn’t open,” said Beata Szydlo, the opposition’s candidate for prime minister.

The facility, which can import 5 billion cubic meters of gas a year, will create an additional supply route for Poland, which got about 4 billion cubic meters through pipelines from Russia in the first six months of this year. The country can also access more gas by reversing flows in existing links carrying Gazprom’s supplies to the west.

“A real chance to fully utilize the terminal will emerge from 2018, when new investments and cross-border links are completed,” Jan Chadam, chief executive officer of Swinoujscie terminal operator Polskie LNG SA, said last week in an interview.

–With assistance from Maciej Martewicz in Warsaw.

©2015 Bloomberg News


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