Poland inaugurated a liquefied natural gas (LNG) terminal on Saturday, designed to boost an alternative to Russian energy supplies in the Baltic region. The political narrative is highly attractive, although in the short run the project could mean higher energy prices.
President Andrzej Duda hailed the project as a “visionary” step towards reinforcing sovereignty. The project will see hundreds of thousands of tonnes of liquefied gas, from suppliers such as Qatar, Australia, and Norway, regasified and distributed to the Polish market.
However, according to market experts, the plant inspired by repeated Russia-Ukraine gas disputes does not offer regasification tariffs that are competitive to those in Western Europe.
However, Warsaw has energy security leverage. In May Poland complaint that it was paying the highest price in Europe for Russian gas and the government is considering not to extend its long-term Yamal pipeline gas contract with Gazprom when it expires in 2022, replacing the Russia supply with LNG imports altogether.
Poland is Gazprom’s fifth biggest EU customer and it is arguing that Russian gas will under any circumstances be cheaper than LNG imports, Bloomberg reported.
Meanwhile, Poland is pushing for interconnectors in Northern and Central Europe that will allow the country to operate as a hub for the supply of gas sourced from Norway and Qatar rather than Russia, BNE reports.
Lithuania has a similar floating facility since 2014, with gas that has meant a surge in prices for major consumers.
(Bloomberg, PAP, BNE Intel)