Poland LNG terminal loan deal trims Russia ties
Poland's goal of reducing its dependence on Russian gas took a step forward on Thursday after it secured the final investments to start construction of its first liquefied natural gas (LNG) terminal, expected to start importing gas from Qatar in 2014, Reuters reports.
The European Bank for Reconstruction and Development (EBRD) said it gave a 75 million euro ($96.76 million), 12-year loan to Polish gas grid operator Gaz-System to begin building the terminal.
The Baltic Sea facility will give Poland and its land-locked neighbours in central and eastern Europe access to the global LNG market, an alternative to gas supplied via pipelines from Russia's Gazprom on which Poland depends almost entirely for imports.
"What this project really represents is a choice for Poland to receive one third of its gas from a country other than Russia for the first time," EBRD Managing Director for Energy and Natural Resources Ricardo Puliti told Reuters.
"The construction of the terminal in Swinoujscie is one of the most important investments currently being carried out in Poland," Treasury Minister Mikolaj Budzanowski, whose ministry oversees state assets, said in a statement.
EBRD's loan is the last element of financing of the 2.7 billion zlotys (660 million euro) investment already partly sponsored by European Union funds and the European Investment Bank.
The terminal will receive oil-indexed gas supplies from Qatar, but two-thirds of its import capacity will be reserved for cargoes imported on a spot basis from elsewhere, potentially opening the door to cheaper energy.
"Given the strong links between the U.S. and Poland I would not be surprised at all if we saw some U.S. gas coming over," Puliti said.
It is hoped that supplier diversity will strengthen Poland's negotiating position in a row with Russia's Gazprom over gas prices that are linked to oil.
Seaborne gas delivered by Qatari state-run exporter Qatargas, even though it is oil-linked, will likely undercut Russian pipeline gas and reduce its dominant position in Poland, Puliti said.
"By raising competition you are in a better position to re-negotiate long-term contracts with all suppliers," he said.
Russia's cash-strapped European customers are stepping up their opposition to oil-indexed gas supplies while the European Commission is investigating Gazprom over suspicions that it hindered the free-flow of supply across the continent.
Previous disruptions to Russian gas supply have fuelled the debate in Poland about its reliance on Moscow.
Its 15 billion cubic metre/year gas market relies on Russia for almost all of its imported supplies and poor connections to nearby European markets hamper attempts to diversify with pipeline supplies.