GAZ-SYSTEM: Poland Gas Import Capacity Rises in 2011

GAZ-SYSTEM S.A. in 2011, thanks to its completed investments and virtual reverse flow services on the Yamal pipeline has increased its technical capacity for natural gas imports to Poland from new directions by 3.3 bcm, which constitutes over 30 per cent of the current imports.

“Development of the natural gas transmission infrastructure has many advantages for the Polish economy and the energy security of the entire country. Above all, it will enable the technical capacity to be created for the off-take of natural gas from various directions. The constant development of the Polish gas transmission system and other structures belonging to the gas infrastructure is also significant from the point of view of the liberalisation of the gas market because it will contribute to increasing competition, enable new entities the possibility of using the transmission network and provide access to a cheaper raw material on the European market,” Jan Chadam, President of the Management Board of GAZ-SYSTEM S.A, said.

In March 2011, GAZ-SYSTEM S.A. started up the Gas Compressor Station in Goleniów. This structure is an important project for the Western Pomeranian region because it will enable the transmission of gas to new Customers, also in the region of the Goleniów Industrial Park. The connection with the Świnoujście-Szczecin gas pipeline and the LNG terminal will make it possible for the gas compressor station to be a significant element of the North-South Gas Corridor in the future, which will connect the domestic transmission networks of Poland, the Czech Republic, Slovakia and Hungary to create a uniform market. The Gas Compressor station in Goleniów was also acknowledged as the “Investment of the Year in 2011” and was awarded the main prize in the Commercial Competition of the Mayor of the Western Pomeranian Voivodship.

The next investment competed in September 2011 is the Polish-Czech Gas Pipeline, a joint project of two gas transmission system operators – the Polish GAZ-SYSTEM S.A. and the Czech NET4GAS, s.r.o. The construction of the gas pipeline was divided into two parts – GAZ-SYSTEM S.A was responsible for the first part encompassing 22 km on the Cieszyn-Skoczów route. The construction of the second part 10 km in length, which runs from the Czech-Polish border to the existing transmission system of NET4GAS, s.r.o. in the region of Třanovice, was supervised by the Czech Company. The construction of the Polish side of the gas pipeline was already completed in 2010, whereas in 2011, the measurement station in Cieszyn was commissioned, which is an integral part of the investment. The Polish-Czech gas pipeline has enabled the Polish system to be connected with the transmission system of the European Union and will contribute to the development of the internal gas transmission systems in Central Europe and their integration into an integrated network. Both Companies will continue to cooperate in the scope of further developments of this connection and increasing its capacity in future years.

In September 2011, the construction of the Włocławek-Gdynia high-pressure gas pipeline was completed. The gas pipeline, with a total length of 252 km and a diameter of 500 mm, is highly significant for the Pomeranian region and entities conducting economic activity in the Pomeranian voivodship. Its performance will ensure security of gas supplies to these regions and will extend its off-take directions. The investment will enable the technical parameters of the transmission network from the Gustorzyn hub to the Gdańsk region and the planned Underground Gas Storeroom in Kosakowo to be unified.

The modernisation of the Jarosław II Gas Compressor Station is another investment which was completed by GAZ-SYSTEM S.A. this year. The new structure is located in the territory of the City of Jarosław in the Subcarpathian Voivodship. The new structure compresses imported gas that is transmitted via the Drozdowicze – Hermanowice hub from the Ukraine and from domestic deposits located in the Jarosław – Przemyśl region. The modernised gas compressor station has replaced the earlier gas compression station that was operating there.

This year, the Company conducted work in the scope of the development of gas pipelines in Lower Silesia. These investments will enable the import of gas to be increased from the western direction via the Lasów point on the Polish-German border as of 2012. The capacity will increase from 0.9 bcm to 1.5 bcm.

GAZ-SYSTEM S.A., by virtue of the decision of the President of the Energy Regulatory Office (ERO) was appointed as the independent operator of the Polish section of the Yamal pipeline for the term up to 31 December 2025. Thanks to the Transmission Network Code (TNC) of the Polish section of the Yamal-Europe Transit Gas Pipeline System which was approved by the ERO, the Company ensures that transparent access to free transmission capacity on this gas pipeline is available to all interested participants. The Code specifies the exact principles of use of the Polish section, the performance of transmission services and detailed guidelines for submitting applications. It has also become possible to use virtual reverse flow services which enable additional volumes of gas to be transmitted to Poland from the western direction via the Włocławek and Lwówek points on the Yamal pipeline up to a volume of approx. 2.3 bcm of gas annually. The gas import possibilities to Poland have increased by 3.3 bcm of gas annually thanks to the development of the Polish-German connection and the transmission capacity of the Polish-Czech gas pipeline.

In 2011, GAZ-SYSTEM S.A. also coordinated the construction of the LNG terminal in Świnoujście performed by the subsidiary Polskie LNG S.A., the Szczecin and Swinoujscie Seaports Authority and the Maritime Office in Szczecin. In 2011, the construction of the walls of two containers for liquefied natural gas was also completed. The containers are 40 m high and 80 m in diameter and belong to the largest in Europe.

The performance of the described investments is another stage in the development of the transmission network in Poland and the commissioning of the structures will enable the system to operate more efficiently and will lead to its increased capacity. It will also enable the safeguarding of the energy security of Poland and the integration of the transmission systems in the European Union.

In 2011, GAZ-SYSTEM S.A. completed the financing procedure for the performance of the investment project up to 2014 with a value of approx. 8 bn PLN. Within this process, financing was obtained from European Union funds for a sum of almost 1.8 bn PLN. Two contracts were also signed with the European Investment Bank​ for the financing of two strategic gas pipelines as well as the LNG terminal in Świnoujście for a possible total amount of 1.2 bn PLN. The Company also signed a contract with a consortium of banks (BRE Bank S.A., Nordea Bank Polska S.A., ING Bank​ Śląski S.A., Bank Millennium S.A. and Bank Pekao S.A.) for the issue of bonds by GAZ-SYSTEM S.A. in the amount of 1.7 bn PLN. The flexible and advantageous external financing conditions negotiated by the Company will enable the construction of an optimal financing structure for the investment project and the effective use of the non-repayable EU grants and the own funds of GAZ-SYSTEM S.A.

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LNG World News Staff, January 10, 2012