Poland’s first LNG terminal to accept gas by end of 2015

Construction of LNG terminal in Swinoujscie Poland
Source: WikiCommons, author: Mateusz War

Poland’s first liquefied natural gas (LNG) terminal build in the Baltic city of Swinoujscie should be able to accept its first gas delivery from Qatar by the end of 2015, with the final completion of the project scheduled for the second quarter of 2016.

Discussions about the project started in 2006. The project was originally developed by PGNiG. In January 2008, SNC-Lavalin was chosen for the front-end engineering design. After creation of Gaz-System and its separation from PGNiG, the newly created company took over the project.

The terminal – which is being build at a cost of 2.4 billion zlotys ($642 million) by a consortium of companies which includes Saipem Canada Inc. and Techint Compagnia Tecnica Internazionale – will have an unloading jetty for large LNG tankers, two storage tanks and re-gasification train.

The Swinoujscie LNG terminal – the construction of which started in 2011 – has been dogged by delays, with initial completion date set at 2014. According to Polish media it is now close to completion with most of the equipment already in place. Legally, however, the terminal will not be deemed as completed until an independent technical audit is carried out. This last step, as explained by the Head of Energy Studies Institute, Andrzej Sikora, is necessary as the final assurance of the quality of the facility – especially that Poland has no prior experience of building LNG terminals.

While the terminal’s capacity is pegged at 5 billion cubic metres per annum, so far only one supply contract has been agreed – for Qatargas to supply Poland’s biggest gas distributor PGNiG. The deal assumes gas deliveries of 1.5 bcm annually via the terminal for 20 years starting from 2014 when the facility was initially set to open.

In conversation with Reuters, Jan Chadam, head of state-owned Polskie LNG, which will operate the terminal, said he is confident of securing more supply contracts to push the terminal to close to its full capacity by 2018.

Chadam acknowledged it would be a challenge to surpass usage rates of around 40 percent to 60 percent seen at other LNG terminals in the European Union but he said increasing regional gas links would help eastern Europe’s biggest economy achieve its goal.

“This is a big site in a strategic location,” Chadam told Reuters in an interview. “Additionally it will be used not only to take gas directed to the Polish market, but to the entire central and eastern European region.”

“We see significant interest especially from our partners in the U.S. and Canada,” he said. “I assume we will sign the first agreements in the second half of 2016.”

The LNG terminal is an important element of Polish energy security system. Along with new pipelines, inter-connectors, virtual and physical reverse on the Yamal pipeline, as well as underground storage and domestic gas production, the LNG imports will help to secure Poland’s energy independence.

The investment in the new terminal will enable Poland to receive natural gas by sea from virtually any supplier in the world. The initial re-gasification capacity of 5 billion cubic metres per year will correspond to one-third of Polish demand for natural gas with future plans of increasing this capacity by half – to 7.5 billion cubic metres per annum.

Poland, which plans to build 2,000 km (1,250 miles) of pipelines criss-crossing Poland over the next 10 years, is also planning to build a gas link to Lithuania to allow it to re-export gas to the Baltics, as well as to create a gas corridor from the Świnoujście terminal to Adria LNG terminal in Croatia

Image: Swinoujscie LNG Terminal during an early phase of construction.

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