WARSAW, June 24 (Reuters) - Poland has signed contracts worth 1.9 billion zlotys ($483 million) to expand its liquefied natural gas (LNG) terminal in Swinoujscie on the Baltic Sea to 8.3 billion cubic metres (bcm) by 2023 from 5 bcm now in response to increasing domestic demand.
An LNG unit of Poland’s gas infrastructure operator Gaz-System and the ports of Szczecin and Swinoujscie on Wednesday signed a contract with a consortium of Porr and TGE Gas Engineering on the expansion project.
Poland sees the facility as a means of reducing the country’s reliance on Russian gas, which still accounts for more than half of its total consumption.
“The terminal gives us the flexibility of receiving gas from different parts of the world,” Piotr Naimski, a minister responsible for energy infrasructure, told a news conference.
Poland’s state-run gas company PGNiG does not plan to extend its long-term gas supply deal with Russia’s Gazprom beyond 2022 when it expires.
It plans to replace Russian gas with LNG supplies and pipeline gas from Norway via a planned gas link.
PGNiG expects gas consumption in Poland to increase in the coming years as gas gradually replaces coal, which the country uses to produce most of its electricity.
$1 = 3.9338 zlotys Reporting by Agnieszka Barteczko; editing by Jason Neely