August 6, 2009 / 1:27 PM / in 10 years

Poland's LNG terminal to cost 600-700 mln euros

WARSAW, Aug 6 (Reuters) - Poland’s liquefied natural gas (LNG) terminal will cost 600 million-700 million euros ($862.8 million-$1.01 billion) after its planned capacity was doubled and will be ready by mid-2014, gas pipeline operator Gaz System chief executive Jan Chadam said on Thursday.

On Thursday Gaz System started a tender for building the terminal, which with an annual capacity of 5 billion cubic metres is Poland’s major attempt at diversifying away from dependence on Russia in terms of gas supplies.

“We preliminarily estimate the cost at 600-700 million euros. Our calculations are based on comparison with similar projects carried out in the world, but we want to get a best possible price,” Chadam told a news conference.

Gaz System wants to finance about 20-40 percent of the project while about half of the needed cash would come from the European Bank of Reconstruction and Development (EBRD) and European Investment Bank (EIB).

Poland has signed a deal with Qatar’s Qatargas Operating Company to deliver about 1.4 billion cubic metres of gas through the terminal starting in 2014.

The LNG terminal is seen as Poland’s most plausible attempt at diversifying gas supplies away from Russia’s dominance.

Russia covers about two thirds of Poland’s annual gas needs of 14 billion cubic metres, with domestic supply accounting for the rest. (Reporting by Pawel Bernat writing by Patryk Wasilewski)

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