Poland Plans FSRU at Port of Gdansk

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Written by Daniel Graeber for Industrial Info Resources (Sugar Land, Texas)--Poland moved closer to its energy security goals after signing agreements to build a floating liquefied natural gas (LNG) terminal at the Port of Gdansk.

Former Soviet republics, along with the rest of Europe, are trying to break Russia's grip on regional energy supplies in response to the war in Ukraine. In 2022, long-term supply agreements ended between Poland and Russian energy company Gazprom, something the International Energy Agency (IEA) said would create significant challenges for an economy expecting to see a significant increase in consumption over the next 10 years.

"Diversification of supply sources and routes, development of natural gas infrastructures, expansion of underground storage capacity and of domestic gas production are the key elements of Poland's gas security policy," the IEA said.

On Thursday, the Port of Gdansk said it signed an agreement with Gaz-System--the natural gas transmission system operator in Poland--and maritime officials to build a floating storage regasification unit (FSRU) for LNG at the port.

The port authority said the facility would not only push coal out of the energy sector, but help with diversification efforts as deliveries would satisfy 30% of total Polish demand at peak capacity.

Lukasz Malinowski, the president of the port, said the facility will increase the importance of the Baltic Sea corridor for countries in Central and Eastern Europe.

"The role of the Port of Gdansk as a place of strategic importance will increase even further." he said.

Poland was almost entirely dependent on Russia for its energy supplies before the outbreak of the war in Ukraine. For just natural gas, about 55% of total supplies came from Russia.

The entire European Union, meanwhile, said that it's been able to reduce the share of imports of Russian gas from 45% in 2021 to 15% last year.

That dependency eased with the completion of the Baltic Pipe to Norway and with the LNG terminal at the Baltic Sea port of Swinoujscie. Combined, those two facilities can deliver as much as 618 billion cubic feet of natural gas (Bcf) to the Polish economy.

With even more gas coming into the planned facility at the Port of Gdansk, development partners believe the region is on the cusp of becoming a major gas hub for Poland's neighbors.

First deliveries are expected in 2028. Though few financial details were unveiled by port authorities, they did say the FSRU would be backed by as much as $21 million in grants from the European Commission.

Inflation in the Polish economy peaked at 18.4% year-on-year to February 2023, but has slowed considerably to around 3.9% year-on-year to January 2024. According to the World Bank, much of the disinflation came from a decline in global commodity prices.

Economic growth is expected to show a 3% acceleration from last year and increase further by 3.4%, the bank said last month.

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