Monday 14 December 2015

First LNG delivery to Swinoujscie terminal

Al Nuaman: ship delivering LNG to Swinoujscie terminal

Construction of LNG terminal in Swinoujscie is one of the largest investments in Polish energy sector in the country’s recent history. LNG terminal has been built with the purpose to diversify natural gas supplies in Poland and giving the state an opportunity to receive price-competitive gas from the Middle East. Now, after 10 years of research, planning and construction, Poland has received the first delivery of liquefied gas from Qatar.

The project of construction of LNG terminal in Swinoujscie lasted for nearly 10 years and cost more than 2.5 billion złoty ( approx. 700 million euro). The first delivery of LNG took place in the morning of 11 December,2015. The tanker called ‘Al-Nuaman’ has delivered 120 billion scm of gas, at the moment dedicated to the number of tests/preliminary operations that the terminal has to go through (cooling and system start-up of installation). The second delivery of liquefied gas to Swinoujscie, for further operational tests, will be carried out in the first quarter of 2016.

Route that Al Nuaman took from Qatar to Poland

The ship, Al Nuaman, got its own fame in Poland and earned many media coverages, due to its “historical mission”. Al Nuaman is 315 meters long and 50 meters wide. It was built in 2009 in the shipyard Daewoo Shipbuilding & Marine Engineering in South Korea. Q-Flex, the technology used on the ship, works as if the ship was a giant thermos, in which gas is transported at a temperature of minus 160 degrees Celsius (this is the boiling point of methane, the main component of the LNG). The ship's crew is 25-35 people, consisting mainly of highly trained officers.

Swinoujscie LNG Terminal – investment of a strategic importance

The terminal is a very important object for Polish energy security – thanks to its construction, it will be possible to diversify gas supply and receive the raw material from many, at the moment unreachable, countries who are offering competitive price (Middle Eastern countries, USA or Canada). The initial regasification capacity of the terminal is equal to 5 billion scm per annum and will correspond to one-third of Polish demand for natural gas. It is taken into consideration that in the following years the facility will expand its capacity to 7.5 billion cubic meters a year.

The terminal will not only diversify and secure national gas supply but it might give Poland an opportunity for further gas trading. Poland could resell delivered gas to the neighbouring states. It is estimated that the terminal will be capable of receiving approx. 40 deliveries a year (covering up to 50 % of Polish gas demand), therefore, with the developed pipeline network, re-selling could be more than possible.

In Poland, at the moment, the dominant entity responsible for the purchase and sale of natural gas was PGNiG (Polish Oil and Gas Group). The company covers about 30 percent of domestic gas demand. The rest of the demand is covered by the import, mainly from Russia (Gazprom). After the collapse of the Soviet Union, satellite states (including Poland, as a country that was strongly influenced by USSR trade, even if not part of the union) were not able to bring to the diversification of gas supplies from the direction other than the East. As a result, central/eastern part of Europe is still characterized by a hermetic historical system of gas transmission pipelines.

The situation has started to change with the construction of the LNG terminal in Swinoujscie and the floating LNG storage and regasification unit for the terminal in Klaipeda (Lithuania). The supplier of gas to Swinoujscie’s terminal is Qatar Gas. Klaipeda will be supplied with gas from Statoil, at least for the following 5 years – the length of the current supply contract.