Gas from new LNG terminal may not tempt Poland's fert producers

29 December 2011 15:22  [Source: ICIS news]

LONDON (ICIS)--Flows of Qatari gas from a €550m ($714m) liquid natural gas (LNG) terminal under construction on the Baltic Sea coast of Poland may prove unattractive to fertilizer producers due to low methane content, a source at Polish fertilizer producer Zaklady Chemiczne Police (ZChP) said on Thursday.

The Qatari gas that a planned north-south pipeline would make available to fertilizer companies in Poland, the Czech Republic, Slovakia and Austria would on the one hand prove relatively inexpensive due to high propane and butane content boosting its calorific value, but on the other hand would not offer so much methane, the component most attractive in fertilizer production, he added.

ZChP is located in Police, a town slightly south of Swinousjscie, the port location where Polskie LNG - a subsidiary of state-owned gas network operator Gaz-System - is constructing the LNG terminal.

“Theoretically, we are excellently located to benefit from this terminal when it opens in a couple of years, but looking at the gas composition we will have to obtain a good price to make deliveries worthwhile,” the source added.

Polskie LNG was not immediately available to comment.

In the first stage of operation, the terminal will have the capacity to regasify 2.5bn cubic metres (cbm)/year of gas. Options to boost the capacity to either 5bn cbm/year or 7.5bn cbm/year could be taken up should demand prove sufficient, according to Polskie LNG's plans.

The north-south pipeline running from the terminal has been labelled a priority energy project by EU energy ministers.

A grant of €211.1m from the EU Infrastructure and Environment Operational Program and a €55m grant from the EU European Energy Programme for Recovery have been approved to cover 45% of the cost of constructing the terminal.

($1 = €0.77)

By: Will Conroy
+44 20 8652 3214

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