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EIB to finance Polish LNG pipeline

LNG Industry,

Gaz-System of Poland has signed an agreement with the European Investment Bank (EIB) for the financing of the planned Lwówek – Odolanów natural gas pipeline.

The financing will consist of a project loan to be taken out by Gaz-System up to a maximum amount of PLN 410 million, which may be drawn in full or in multiple tranches (minimum value of each tranche will be PLN 50 million). The credit loan will be available for 22 months from the signing of the contract. The maximum repayment period is 20 years.

Energy security

Construction of the Lwówek – Odolanów natural gas pipeline is an important part of strengthening the security, reliability and flexibility of the gas transmission system in Poland and neighboring countries, especially in the context of the planned Central European North-South Gas Corridor.

The pipeline will offer the possibility of transporting increased volumes of gas within Poland, including the transportation of gas from the LNG terminal in Swinoujscie to the border with the Czech Republic, Slovakia and Ukraine. For this reason, the project was granted PCI (Project of Common Interest) by the European Commission in October 2013.

Polish gas supplies

László Baranyay, EIB VP responsible for operations in Poland, commented: “The objective of the EIB, the European Union's bank, is among other things to promote the security and diversification of energy supplies. We are therefore particularly pleased with the conclusion of an agreement with Gaz-System, as this project will contribute to increase the capacity and reliability of the Polish gas transmission system and allow for a better connection to new gas supplies.

“Along with other projects previously [financed] by the bank in Poland, this investment represents an important step towards increasing the security of energy supply in Europe. The EIB loan is also an important contribution to the modernisation of the bank in the Polish energy sector, which is vital to the economic development of the country.”

Pipeline development

The pipeline is scheduled for completion in 2017, and will have a diameter of 1000 mm and a length of approximately 170 km. The estimated value of the project is almost PLN 850 million. The project is still in the design stage, and has so far gained PLN 3.76 million in funding from the Operational Programme Infrastructure and Environment.

Jan Chadam, President of Gaz-System, commented: “This is another investment loan granted to Gaz-System SA by the European Investment Bank for [a key] investment not only from the perspective of our company or our country, but relevant to the development of an integrated gas pipeline network in Europe. [Thus, the] EIB supports our common aspirations for EU's energy security based on the principles of solidarity and community economic interests.”

EIB loans

The first agreement between Gaz-System and the EIB, for the amount of PLN 600 million, was signed on 14 July 2011 for the construction of gas pipelines Rembelszczyzna-Gustorzyn and Szczecin-Gdansk. In December 2011, the European Investment Bank also granted the company a loan of PLN 600 million for the financing of the LNG terminal in Swinoujscie.

Edited from various sources by Katie Woodward

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