While there are no big protests against the floating LNG terminal in Poland, activists are not giving up. They staged a rally at the Economic Forum in Karpacz. They are protesting against the FSRU2, which can make the Visegrad Group independent of Russia and allow Europe to part with Gazprom in accordance with the REPowerEU plan – writes Wojciech Jakóbik, editor-in-chief at BiznesAlert.pl.
The latest edition of the Economic Forum in Karpacz offered the opportunity to discuss LNG supplies from Poland to countries that do not have access to the sea, such as the Czech Republic, Slovakia and Hungary. Reportedly they are to be interested in access to the floating LNG port in Gdańsk. Polish gas pipeline operator Gaz-System plans to bring one or two Floating Storage Regasification Units (FSRU) to import more LNG. The second unit, first reported on by BiznesAlert.pl, is to be ordered if the other members of the Visegrad Four (Czechia, Slovakia and Hungary) express interest in purchasing the gas by submitting binding offers during the open season procedure for the so-called FSRU2, which is to be completed in autumn 2023. However, this project, like its analogues in Germany, may become a target of activists, and that will happen despite the fact that it is being done in line with environmental regulations, which Berlin ignored when it was launching its FSRU projects due to security concerns.
Activists from Inicjatywa Wschód, known for its protests against the use of fossil fuels in Poland, came to Karpacz. „The conference partners include Orlen, KGHM Polska Miedź and Gaz-System, all of which are poisoning Poland with fossil fuels and dirty energy. The guest list will include representatives of state – owned companies who ignore the need for a truly fair energy transition and make record profits on high energy prices at the expense of Polish men and women,” the activists argued. „It is fossil fuels that are the source of further strengthening of the monopoly on power in Poland. We have had enough of this and we will act to make the current political class from the geriatric era a thing of the past,” commented Dominika Lasota, from Inicjatywa Wschód.
However, the mentioned geriatric era still gets about 70 percent of its energy from coal and needs gas in combined heat and power plants, including new ones, to reduce the sector’s emissions by replacing coal. It is advisable to switch more quickly to renewable energy sources where possible, but so far there is no solution to replace the CHP plants with a large heat pump. District heating is therefore turning to gas, maintaining the need for further diversification of its supply.
However, this policy is also criticized by activists who will meet on this issue in court. When commenting on the FSRU project in Gdańsk, Nawojka Ciborska from the Bombelki collective called Gaz-System „a gang of criminals who, for their profits, are pushing us straight to a catastrophe.” The company took the case to court. Bombelki protested against the FSRU by displaying their slogans at the Copernicus Center in Warsaw. Nawojka Ciborska reported on this event on the portal Zielone Wiadomości.
Pracownia na rzecz Wszystkich Istot (an environmental organization – ed.) has informed about Gaz-System suing Ciborska for infringement of personal interests. However, the activists did not back down. „In the opinion of the Helsinki Foundation for Human Rights, which defends the defendants, the case is a typical SLAPP ( Strategic Lawsuit Against Public Participation), which is an unjustified lawsuit aimed only at creating a chilling effect and intimidating people who speak out on socially important topics. The foundation emphasizes that the state treasury company does not have the right to protection of personal interests and the public has the right to information,” the Helsinki Foundation said in a statement.
„Criticism of the activities of fossil fuel companies in the era of the climate crisis should not surprise anyone. Activists are calling for action to reduce emissions, not increase them. The construction of a new LNG terminal will accelerate the vicious circle of dependence on gas, driving production and emissions. Gaz-System spends millions to promote its image and does not want the public to know the truth that we cannot continue to invest in natural gas and that there are alternatives to this fuel,” said Katarzyna Wiekiera from Pracownia na rzecz Wszystkich Istot. The NGO warns about the gas trap I wrote about in BiznesAlert.pl back in 2021. Poland should not rely on natural gas as a transition fuel for transformation beyond the necessary minimum. However, the protest against the FSRU and FSRU2 has no justification, because these projects will make it possible to replace gas from Russia, and will not increase its consumption.
Both vessels can reach a combined capacity of 10.6 (6.1+4.5) billion cubic meters a year. The target capacity of the LNG terminal in Świnoujście is 8.1 billion cubic meters annually, and the Baltic Pipe has a capacity of 10 billion cubic meters a year. Together we get 28.7 billion cubic meters annual capacity of physical supplies from outside Russia. The Polish annual demand for access to gas pipelines as planned by Gaz-System in 2023 is 14.8 billion cubic meters annually, but according to the forecast for 2030, that will be 24.1-28 billion cubic meters a year. That’s 10-12 billion cubic meters less than the forecast that had been presented back in 2021. Poland is escaping the gas trap, having learned the energy crisis lesson. However, Poland’s escape from Putin’s gas trap may not be possible without the FSRU, while the FSRU2 would also help its southern neighbors get access to non-Russian gas. Assuming Gaz-System is right and the demand in Poland will drop to 24.1 bcm, and the FSRU and FSRU2 diversification projects will launch in 2028 ensuring in total 28.7 bcm supply, Poland will have a surplus of 4.6 bcm. This is almost as much as the postulated capacity of FSRU2, which is 4.5 billion cubic meters. If the Czechs, Slovaks and Hungarians formally confirm their interest in LNG supplied by Poland, we will have access to gas from outside Russia to meet the needs of the region. It is worth noting that higher demand in Poland could remove this surplus, reducing our neighbors’ access to overseas gas, however Gaz-System drafts forecasts for the demand for the use of its gas pipelines, and therefore can also include the interest of the neighbors.
Poland can become a partner in the implementation of the plan to part with Russian gas in the European Union by 2027 at the latest, i.e. REPowerEU. Gazprom’s share of the European market fell from more than 40 percent in 2021 to 7.5 percent in August 2023 (ICIS). The share of Russian gas fell to 13 percent in the first half of 2023 (Eurostat). The last billion cubic meters from Russia flow mainly to Central Europe. However, the region needs to take into account the risk that the supply from Russia may be interrupted by the Kremlin already this winter, or if the Ukraine-Russia transit deal ends at the end of 2024. During the transition period, these countries can import gas from the European exchange, which is why the Czechs talked about deliveries through terminals in the Netherlands and the Hungarians about imports from Azerbaijan. Further deliveries from Russia via Turkish Stream to Turkey and then to Europe are also at stake. However, if the REPowerEU plan is to be implemented, Poland’s southern neighbors ultimately need long-term contracts for supplies from outside Russia, and this will be made possible by the FSRU2, against which the mentioned above activists protest.
Still, the activists are right that we should be working on lowering demand for gas in general to become independent of Russia and to implement climate goals at the same time. It may turn out that the destruction of demand caused by the energy crisis will be deep, especially in the household heating sector and industry, and then forecasts of demand for access to gas pipelines in Poland and Europe will turn out to be overestimated. It is worth recalling in this context that the FSRU and FSRU2 will be leased for about a decade and can be returned just like a leased car if they prove unnecessary. The Lithuanians, who leased the first FSRU in Europe, which they not accidentally called Independence in 2014, decided to buy it, because they believe that it will still be needed. It is worth mentioning that it provides, among other things, deliveries to Poland as part of the turbo-diversification carried out in 2022 in response to the invasion of Russia in Ukraine. If it turns out that the Poles do not need such a large capacity in Gdańsk, they will turn away the ships. This is therefore a more climate-friendly solution than a stationary LNG terminal.