Poland intends to buy a floating LNG terminal, which will be mooring in the Gulf of Gdansk and will be the second source of liquefied gas for the domestic and regional market – writes Wojciech Jakóbik, editor-in-chief of BiznesAlert.pl.
BiznesAlert.pl determined that Poland will purchase the Floating Storage and Regasification Unit (FSRU), which is to be delivered to the Gulf of Gdansk in 2024-25. The reason of this decision is the higher profitability of such a solution than the lease, which was decided by Lithuanians who have been using the FSRU Niepodległość in Klaipeda since 2014. They signed a contract for the lease of an object with the Norwegian Hoegh LNG. Now they want to buy it to reduce the cost of use by up to a third. Lithuanians pay USD 68.9 million for the FSRU lease, and the cost of the purchase is estimated at USD 121-160 million, according to the calculations presented in BiznesAlert.pl in 2018.
Poles want to learn from the bitter Lithuanians’ lesson and buy FSRU at once. It was the most interesting topic of the first day of the XXII GAZTERM conference. – The demand for gas is growing fast, so we have decided that a floating FSRU terminal will be erected in the Gulf of Gdansk in 2024-2025. This date is related to the construction of the transmission network, which will include this terminal in a comprehensive network of gas connections throughout Poland. The investor is Gaz-System, i.e. the transmission system operator – said the Government Plenipotentiary for Strategic Energy Infrastructure Piotr Naimski during GAZTERM conference. – This terminal will allow us to bring this amount of gas into the Polish system, so that we can still offer it to southern neighbors of Poland or to Ukraine, if there is a need – he added.
However, the FSRU may also serve the domestic market, if the demand will grow faster due to the development of Renewables secured by gas power plants, such as Dolna Odra near the Świnoujście terminal. LNG import conditions are temporary favorable. During GAZTERM conference, the president of PGNiG Piotr Woźniak reminded that currently liquefied gas purchased on the spot is 20-30 percent cheaper than this offered by the Yamal contract. Meanwhile, the fall in prices in Asia results in the convergence of prices on stock exchanges on this continent and in Europe. According to what could have been previously read in BiznesAlert.pl, this means that it is more attractive to deliver gas to Europe, which can be seen in the increase in supplies recorded in the first quarter of this year.
Once again we can see why Baltic Pipe is needed. When the increase in gas demand in China or another factor will increase the attractiveness of supplies from Asia again, Poland will still have an attractive alternative in the form of gas pipeline supplies under a long-term contract indexed by the European stock exchange, because that’s how Statoil indexes.
Minister Naimski informed that the decision on the FSRU in the Gulf of Gdansk has already been made. It is still necessary to wait for the final investment decision in this matter. He revealed one more interesting detail. The operator of the FSRU is to be Gaz-System. However, he did not specify whether he would transfer these competences to a subsidiary, such as Polskie LNG in case of Świnoujście, and whether he would do so directly. If these plans are successful, the Poles will have at their disposal a second terminal, this time a floating one, by 2025. Its planned capacity ranges from 4 to 8 billion cubic meters of gas annually, or in the most optimistic version, as much as Poles now bring annually from Russia.