Poland’s Gaz-System has shelved, at least for the time being, its plans for second floating storage and regasification unit-based liquefied natural gas import scheme in the Baltic port of Gdansk after a lacklustre response from market participants.
Gaz-System on Friday confirmed its open season procedure, which had sought binding offers from companies interested in regas services of its FSRU 2 project, failed to underpin the touted 4.5 billion cubic metres annual capacity project.
“The overall objective of the… procedure was to confirm the interest of market participants in increasing the regasification capacity of the FSRU terminal by submitting long-term orders for the regasification services which would justify implementation of the said project,” Gaz-System said.
“Nevertheless, the interest in the regasification services declared by the participants imply that discussions may be continued in the future.”
The company is now continuing its efforts on the FSRU 1 project in the Gdansk area of Poland, which is designed to have annual regasification capacity of up to 6.1 Bcm that will further increase the ability of consumers in the country to access diversified natural gas sources.
BW LNG and Mitsui OSK Lines are in a two-horse race to supply this floater, after Gaz-System in August lined up Orlen for 100% of the regas capacity which, the operator said, “provided the business case for further development of the project”.
Gaz-System added that its planned FSRU 2 project would be the subject of further analysis.
“The hydroengineering infrastructure that will be built as part of the FSRU 1 project will also provide for the possibility of a second storage and regasification unit development if market demand for the FSRU 2 is confirmed in the future.”
Ukraine’s gas industry leading analyst Sergiy Makogon told Upstream that interest in FSRU 2 in Gdansk “could be significantly increased by providing shippers with the possibility of exporting gas to Ukraine, either to underground storage or [for] direct sales”.
“Ukraine can already transport about 6.6 Bcm per annum of gas from its border with Poland, however, construction of additional pipelines inside Poland towards the Ukrainian border is needed to support such cross-border movement. The European Union should fund this project in Poland as it did with interconnectors linking Poland with Slovakia and Lithuania,” Makogon said.
At the end of October, Gaz-System and Ukraine’s transmission authority, Operator GTS Ukrainy, invited market participants to study a joint draft proposal to increase the incremental gas shipping capacity between the two countries, and submit their opinions until 30 November this year.