PGNiG Has Options If Polish LNG Terminal Misses Launch Date - Source

   By Marynia Kruk 

WARSAW--Polish gas firm PGNiG SA (PGN.WA) can receive its first contracted shipments of liquefied natural gas at some other regasification point in the world in the event the planned launch of Poland's LNG terminal on the Baltic coast is delayed beyond 2014, a person familiar with the matter told The Wall Street Journal.

According to reports in local media, the construction is several months behind schedule due to financial difficulties faced by the general contractors on the government-owned project, Italy's Saipem SpA (SPM.MI) and Poland's PBG SA (PBG.WA). PBG in June filed for bankruptcy protection, though the terminal's owner, wholly state-owned Polskie LNG, said it isn't making provisions for a start date beyond the end of 2014.

State-controlled PGNiG signed an agreement with Qatargas, the top exporter of liquefied natural gas, in 2009 to receive annual shipments of 1.6 billion cubic meters of LNG starting in 2014 through to 2034 as part of Poland's strategy to diversify its energy supply sources away from Russia.

This agreement enables PGNiG to send its contracted LNG tanker to other terminals, the person said.

PGNiG has a parallel agreement with Polskie LNG, the owner of the under-contruction Baltic terminal, for regassification services from July 1, 2014 to Dec. 31, 2014, said Polskie LNG spokesman Maciej Mazur.

That provides some wiggle room in case the LNG terminal official grand opening--agreed as June 30, 2014, with the terminal's general contractors--hits a few months of delays, Mr. Mazur said.

"June 30 continues to be our deadline, but our priority right now is quality, not time," he added. "One to three months of delay won't have an effect because we have flexibility."

In its initial phase of operation, the Polish LNG terminal will have the capacity to receive 5 billion cubic meters of natural gas per year.

"We're not considering [a delay past the end of 2014] because we hope we won't have to," Mr. Mazur said.

He added he could imagine PGNiG could redirect its first shipment of Qatari LNG to the Gate Terminal in Rotterdam, but that he didn't have any first hand information on the matter.

-Write to Marynia Kruk at [e-mail]