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Poland gets finance for LNG terminal

LNG Industry,

Polskie LNG SA has arranged €950 million worth of financing for Poland’s first LNG import terminal. €200 million will be provided by the European Bank for reconstruction and development, while 10 other banks may each purchase €75 million worth of Polskie LNG bonds.

The European Investment Bank will also join the investment group and Polskie LNG plans to provide a minimum of 30% of the project funds.

It is estimated that the LNG terminal itself will cost approximately €600 million but the final cost will not be known until later in the year, at which point the level of financing required will be set. Currently there are three consortia bidding to build the LNG plant; Saipem SPA and PBG; Tecnimont SPA and Polimex-Mostostal SA and Sofregaz SA; and Daewoo Engineering & Construction Co. with Korean Gas Corp.

Negotiations will continue with each of the consortia until May when a contract will be drawn up with the consortium of Polskie LNG’s choice. The Swinoujscie terminal is estimated to come online in 2014 and will have an initial capacity of 5 billion m3/y, but this may increase to a capacity of 7.5 billion m3/y in 2017/2018 depending on Polish gas demand.

Any excess gas is likely to be either sold to the Czech Republic and Germany or used in gas fired power plants, which are currently in the planning stages.

The aim of the project is to diversify Poland’s energy supplies. It is hoped that the LNG terminal, when it comes online, will be able to supply up to 30% of Poland’s energy needs and reduce its reliance on Russian gas imports. Currently Poland has to import two-thirds of its gas from Russia.

Poland has already signed a 20 year supply agreement with Qatar for 1.5 billion m3/y of LNG, which will be delivered in 11 -12 Q-flex vessels, the largest in the Qatargas fleet. To this end, the terminal will need to have a 315 m wide dock to accommodate the massive Q-flex vessels.

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