Tuesday 3 March 2015

Delays of the construction of LNG terminal in Swinoujscie

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The LNG terminal, which is being constructed in Swinoujscie, has been closely examined by the Supreme Chamber of Control ( in Polish: Najwyzsza Izba Kontroli, NIK). NIK has been preparing report on the emerging strategic investment in Swinoujscie, which seem to not be very positive. Inspectors note that the LNG terminal has not been put to use, yet and the plan for its opening is constantly rescheduled:  from the end of June last year, as originally planned, to the end of 2014, as it was written in the annex to the new agreement. Currently, the terminal is still not in use. Due to all those factors, there is a high risk of loss of EU subsidies for the construction of this terminal.




Problems with gas terminal in Swinoujscie mean that Poland is still not able to receive deliveries of liquefied gas and send it to customers after regasification. According to NIK, the main reason of the delay was dispute between the Transportation Technical Supervision (TDT) and contractor (General Contractor of Investment). It boiled down initially to determine which sections of pipelines are subject to statutory inspection of TDT, which only conformity assessment (certification). NIK noted that during construction of the terminal, TDT played  “double role”, which created a situation of conflict of interest. TDT performed statutory inspection tasks in relation to the contractor (General Contractor) in terms of technical supervision and, at the same time, paid contractor (General Contractor) to perform the inspection for him, on the basis of a civil contract, to assess compliance with the technical requirements of equipment (certified the device within the terminal).

According to NIK, another reason for the delays was the bankruptcy of companies belonging to the PBG (one of the consortium members of General Contractor; later mentioned as Gaz-System and PLNG). NIK said that Gaz-System and PLNG did not pursue their tasks in accordance with the approved schedule. Two of the four investment projects (LNG terminal and pipeline Swinoujscie-Szczecin) have been significantly delayed due to a number of irregularities, which mainly consisted of: ineffective supervision carried out by Gaz-System and PLNG in relation to contractors, ineffective enforcement by Gaz-System and PLNG from contractors proper and timely perform its obligations under the contract; mistakes made by Gaz-System and PLNG at the conclusion of annexes to the agreements with contractors.

The report also criticizes the supervision of the process of building an LNG terminal on the part of the relevant ministries. As a result, LNG terminal has not been put into operation yet, not at the end of June last year, as originally planned, to the end of 2014, as it was written in the annex to the new agreement.

According to controllers who wrote the report, trouble with the opening of the terminal bear the risk of loss of EU funds, used to co-finance the investment. NIK also recalls that the gas terminal delay postpones start receiving LNG supplies – the risk which is currently out of the picture, as the dialogue with Qatargas, the supplier of LNG, has been concluded positively (there are no additional fines for the lack of gas received).

To add up the controversies surrounding construction of the terminal, Ministry of Treasury wanted the NIK’s report to not be publicly available. Ministry’ spokeswoman Agnieszka Jablonska-Twarog in an interview with IAR explained that this was due to the ongoing financial negotiations with another contractor terminal, which obliged involved sides to not publically speak about financial statement of the investment.

At the moment, the official statement of the government relates to the final, safe end of the construction of the terminal, rather than keeping the deadlines – as pointed out by the Minister of Economy, Janusz Piechocinski.

It is said that the terminal should be fully operative by the end of 2015.








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Picture:

http://www.thenews.pl/3d358b33-43db-46bf-a85e-f057f2f998a0.file

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