Poland: European Commission Supports Swinoujscie LNG Terminal

Last week, the European Commission gave the green light for spending of up to 925 million PLN (211.1 million euros) from the Infrastructure and Environment Operational Programme (IaEOP) for the implementation of building of a re-gasification terminal in Swinoujście.

The Commission’s decision is the final step to sign a project financing agreement by Polskie LNG. The non-refundable funds obtained in this way will enable to reduce the costs of the LNG terminal construction. As a result, they will also affect to lower the re-gasification services tariff, and thus – imported gas.

The LNG terminal in Świnoujście – an investment made by a special purposed company Polskie LNG – are the tanks and systems for future storage and re-gasification of about 1/3 of Polish demand for natural gas.

The investment fits perfectly in the European strategy of energy security development, which is reflected in many important documents of the Community (energy policy, SEER and others). It also meets the objectives of the so-called X Priority Axis of the Infrastructure and Environment Operational Programme. The announced decision ends an administrative procedure initiated on August 4, 2011. On this day, the Office of Competition and Consumer Protection (OCCP) asked the European Commission to recognise the public support for the project of the LNG terminal in Świnoujście as legitimate, that is compatible with the internal market and the Community legislation,

– Today, at less that 1000 days separating us for the start of the LNG terminal in Świnoujście, I am sure of not only the beginning date of this facility operation, but also that it will be a really economical investment. – says Zbigniew Rapciak, President of Polskie LNG – the non-fundable funds are nothing other than savings for the State budget, citizens and also the future customers of gas from Świnoujście – emphasizes president Rapciak.

The construction of the LNG terminal, which is the most important Polish investment, aims to ensure the energy security for Poland. According to the initial assumptions as from 2006, this investment was to be entirely financed from the State budget in the amount of over 4 billion PLN. Today announcement means that the total amount of grants obtained so far will constitute 45% of costs of the terminal worth 2.5 billion PLN.

– This is an example of a perfect co-operation between business with administration that has been crowned with today success – adds Piotr Mika, Director of the Financial Department at Polskie LNG. – It is an undeniable merit of the Ministry of Regional Development, Ministry of Economy, Ministry of Treasury, the Oil and Gas Institute, the Office of Competition and Consumer Protection, as well as the financial department of our company – indicates director Mika.

The funds obtained in this manner are non-refundable. In November 2010, the project already received a non-refundable grant of 55 million EURO from the European Union from the European Energy Programme for Recovery. The contribution of the following EU support for this investment means a lower cost of the project for the company. And for the consumers – a lower price of gas, which results from lower costs included in the re-gasification tariff approved by the Energy Regulatory Office.

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Source: Polskie LNG, October 11, 2011; Image: gov.pl