Will there be a Maritime LNG Gas Terminal in the Port of Gdansk?

11.01.2006

Poland utilizes 12.5-13 bn m3 of gas annually, of which 4.2-4.3 bn m3 comes from domestic mining, 1.5-2 bn m3 of gas is imported from Asian states, 1 bn m3 comes from Norway and Germany, and 5.6-6.6 bn m3 is imported from Russia. The latter, especially in view of Russia's determined market attitude towards Ukraine, evokes serious concern in Poland. In terms of state security, the issue of diversifying energy supplies, specifically gas, has become the focus of attention.

This issue has drawn attention for some time now. As early as the 1990s, a large number of discussions and studies focused on the diversification of energy supplies. However, a lack of political will to make such a decision has effectively prevented a solution from being reached. Likewise, the Port of Gdansk participated in that attempt aimed at addressing the problem of diversifying energy supplies by supporting the importation of liquefied gas by sea. Port's representatives took part in discussions held with the Polish Oil and Gas Company and studies were drawn up that indicated benefits resulting from the location of a maritime gas terminal in the Port of Gdansk.

The above-mentioned absence of political decisions brought the work to a halt. Nevertheless, the beginning of 2005 saw the Port of Gdansk Authority SA and the Polish Oil and Gas Company re-launch their efforts to achieve energy diversification. This brought about, among other things, a study on the location of the Maritime LNG Terminal in the Port of Gdansk, commissioned by the Port of Gdansk Authority SA and developed by the "Ekokonsult" Design and Consulting Office. In October, 2005, the Study was presented to the Polish Oil and Gas Company.

The Port of Gdansk, and specifically one of its regions - the Northern Port boats superb conditions, highly conducive to the location of a gas terminal. These comprise, first and foremost, excellent hydrotechnical conditions - including easy navigation and a natural 15-metre depth of the port basin, enabling the handling of sizable vessels, so-called, methane carriers designed for the shipment of liquefied gas. It is estimated that, from an economic viewpoint, vessels with a carrying capacity of about 120 thou. m3 of gas prove the most advantageous and these are vessels with a draught of some 12 metres. It can be inferred, therefore, that it is feasible to set up and operate the terminal, with no dredging work necessary.

A widely recognized advantage of the Northern Port is its yearlong ice-free conditions. Equally important is the fact that, in the area of a proposed location, the Port of Gdansk offers a well-developed infrastructure that can be successfully utilized during the development of the terminal.

Most significantly - broad benefits resulting from locating the LNG terminal in the Port of Gdansk are combined with the possible connection of the terminal with the National Gas System that can secure regular reception of large quantities of gas, with the purpose of storing it in the underground storage facilities or supplying gas to recipients. Specifically, it is possible to connect the LNG terminal with the national gas network in the region of Suchy Dab-Pszczolki, by means of an approximately 32-kilometre pipeline. At present, parallel with the existing Wlocalwek-Gdynia gas pipeline, another gas main pipeline is under construction, that will enable gas to be forced through the "Pszczolki" intersection from the LNG terminal to the National Gas System to the south - towards main urban and industrial agglomerations and the existing "Mogilno" Underground Gas Storage in the Kujawy and Pomerania Region, with a target capacity of 700 million m3, and - to the north - to the planned "Mechelinki" Underground Gas Storage (Pomerania Region), with a target capacity of 300 milion m3.

These favourable conditions significantly offset investment implementation costs. As has been estimated, the most profitable option (the preliminary Study on the Location of the Maritime LNG Terminal in the Port of Gdansk sets out three possible locations) provides for construction costs of the LNG terminal in the Port of Gdansk to amount to approximately USD 300 million.

The announcement of a decision by Prime Minister Kazimierz Marcinkiewicz concerning the construction of a gas terminal - with no specific guidelines as for its location - has come as a response to the need to diversify energy supplies and activated, among the others, the two directly interested hubs, i.e. the ports of Gdansk and Swinoujscie as the potential locations of the construction of the terminal. Representatives of various political parties, interest groups and a broad range of backgrounds are expressing their views on this issue. However, while each voice in the discussion wields a considerable weight, it is important that those with substantial merit become the most significant and prevailing to ensure that a decision of such vital importance is prevented from sinking in a flood of special and local interests.