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Polish Gas Terminal Speaks Volumes

Tuesday, 02 April 2019 | 00:00

Follow the flows or the planned flows of liquified natural gas (LNG) and you have a decent picture of how the emerging political order in Europe is being reconfigured.

A case in point is the relationship between Poland and the U.S. Both have traditionally poor relations with Moscow, it is known. Both have fragile relations with Brussels under the leaderships of Donald Trump and Jaroslaw Kaczynski. And both have an interest in breaking Russia’s gas hold on Europe.

As the Nord Stream II pipeline between Russia and Germany faces increasingly strong political headwinds, the search for alternatives sources of supply goes on within the EU and Poland’s LNG terminal in the northern port of Swinoujscie has become a crucial part of the picture.

Polish imports

The Polish oil and gas company PGNiG said spot deliveries via the Swinoujscie terminal from the U.S. are set for April 3 and a cargo from Qatar on the long-term contract is scheduled for April 16.

The number of spot supplies is rising,” a PGNiG spokesman said. “The upcoming delivery from the US will be the fifth spot supply this year already, whereas we have had four spot deliveries altogether in 2018. These are single deliveries based on the short-term contracts contrary to deliveries from mid- and long-term contracts we have with the Qatari and US companies. The deliveries from the long-term contract with Cheniere we have signed in late-2018 will commence later this year.”

U.S. exports

Sempra Energy also wants to become one of the largest LNG exporters in the U.S. and one of its clients will be Polish PGNiG.

CEO Jeff Martin told Reuters about the company’s bold plans: five projects for liquefied gas – Cameron LNG (two stages) in Louisiana, Port Arthur LNG in Texas and Costa Azul LNG (two stages) in the Gulf of California, Mexico. Together they will give a capacity of 45 million tons per year.

After their implementation, Sempra will become the second LNG supplier from the USA after Cheniere Energy, which already has two export terminals.

Port Arthur LNG with planned capacity of 12 million tons per year is to get the final investment decision in the first quarter of 2020, if it gets the right number of contracts. The first one is a PGNiG order from Poland for 2 million tonnes per year for 20 years from 2023.

The terminal

The Polish terminal is operated by Polskie LNG, a subsidiary of Poland’s gas transmission system operator Gaz-System.

The company’s expansion plans also include a building second wharf for smaller vessels, a third LNG tank with a capacity of 180,000 m3 and infrastructure for trans-shipment of liquefied gas into railway tankers and ISO containers.

The Polish terminal’s regasification capacity is 5 billion m3 per year, but Polskie LNG plans to increase it to 7.5 billion m3, which would satisfy around 50% of Poland’s annual gas demand.

“Our terminal and its expansion plan fit perfectly the perspective of rapid development of so-called SSLNG – Small Scale LNG,” said Paweł Jakubowski, Polskie LNG’s CEO.

In mid-January, PGNiG signed three production licences in Norwegian waters and in October it paid $220 million for a stake in the Tommeliten Alpha gas field, south of the Norwegian mainland.

Jakubowski said the LNG deliveries and Norwegian gas supplies could reorientate the central European gas market by creating north-south gas routes to replace the existing east-west links, weakening reliance on Russia.

Poland is working on interconnectors with Lithuania, Ukraine, Slovakia and the Czech Republic to be able to deliver surplus volumes to neighbouring markets to create a regional gas hub,” Jakubowski said.

Poland is currently the seventh-largest gas consumer in the EU, using around 17 billion cubic meters (bcm) of gas a year (about 20-25 percent of Germany’s consumption).

It imports over half of that from Gazprom. Gas demand within Poland is set to rise as coal-driven electricity is replaced by gas-driven plants and Warsaw plans to make Poland a gas hub for the Central and Eastern Europe region and maybe also Ukraine.

Poland is also planning the construction of new gas links to the Czech Republic and Slovakia (scheduled for 2019), Lithuania (2021) and with Denmark (2022). A new gas pipeline to Ukraine is also under consideration.

Baltic-connector would allow imports of piped gas via a pipeline between Poland and Lithuania called GIPL, due to be completed by December 2021, which in turn could be connected to the planned Baltic Pipe linking Poland to Norway, via Denmark.

The Polish and Slovak gas transmission system operators, Gaz-System and Eustream, signed a connection agreement in April 2018 for implementing the Poland-Slovakia Gas Interconnection (PCI) project. After construction, the new pipeline will enhance the regional security of supply and integration of the natural gas markets in the region.

We want to underline the importance of the completing a missing link between Poland and Slovakia for the whole CEE region,” Pavol Kubík, a spokesman for EUstream in Bratislava, said.

The Poland-Slovakia gas interconnection is an important part of European North-South priority corridor to ensure diversity in natural gas supplies in Central and South-Eastern Europe. Implementation of the project will enable CEE countries (including Ukraine) to benefit from the direct access to global LNG market and to different natural gas supply sources from the North (Świnoujście LNG, Baltic Pipe, Klaipeda LNG, Gas Interconnection Poland-Lithuania) as well as from the South, through the Slovakia-Hungary Interconnection (and the planned Eastring pipeline).”
Source: Forbes

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