Polskie LNG

Translated version of this PSD: Polish

Project Description

The project comprises the construction of a liquefied natural gas (“LNG”) re-gasification terminal and associated infrastructure near the city of Świnoujście on the far north-western coast of Poland. The terminal will have an initial re-gasification capacity of 5 billion cubic metres per annum. Polskie LNG S.A. (PLNG) is the entity responsible for the implementation and operation of the LNG terminal. PLNG is owned by OGP Gaz-System SA, the gas transmission operator in Poland. The LNG terminal facility will help Poland to diversify its sources of energy supplies.

The Bank is considering providing a loan of up to PLN 300,000,000 to co-finance the construction of the LNG terminal. Total Project costs are approximately EUR 693 million.

Transition Impact

The Project’s transition impact is likely to derive from:

(i) market expansion, as the construction of the Terminal will allow the integration of the Polish gas market within the international LNG value chain. It will facilitate the diversification of the supply portfolio and it may increase the contestability in the downstream gas market by facilitating the entry of new players;
(ii) the Project may favour the establishment and integration of the regional gas market upon successful commissioning of additional infrastructure;
(iii) the Project will introduce new skills to Poland and the creation of a centre of expertise on the Baltic coast, including large project management skills.

The Client

OGP Gaz-System S.A., the Polish state-owned gas transmission system operator.

EBRD Finance

Up to PLN 300,000,000 loan to OGP Gaz-System SA, to be used for the financing of the LNG terminal.

Project Cost

EUR 691 million.

Environmental Impact

Categorisation and justification

The Project has been categorised as ‘A ‘. An EIA is required in accordance with Polish law and Appendix 1 of the 2008 EBRD Environmental and Social Policy.

Information reviewed

The appraisal of this project has been undertaken by independent consultants in 2010 based on the Environmental Impact Assessments (EIA) prepared under Polish regulatory requirements, permits and decision documentation relating to the LNG Terminal, Breakwater, Jetty and Pipeline. All these documents are available on the PLNG website in English and Polish.

A further site visit and review of additional documents were completed in 2012, to obtain an update on the progress of works and the environmental, health and safety performance of the project to date.

Environmental and Social issues

EIA’s for each project component were prepared separately so an overarching Non-Technical Summary (NTS), Cumulative Impact Memorandum and Biodiversity Management Plan have been prepared and disclosed considering the impact of the overall project.

A Social Review document was prepared to provide additional information on the social impacts of the project as these were not fully addressed in the EIA documentation. Potential impacts to fishermen, road users, local residents, businesses and tourists, construction workers, public safety and land owners and users along the pipeline route were reviewed. No physical displacement will be required. Social mitigation measures have been included in the Environmental and Social Action Plan (ESAP) for the project.

The potential impacts of the project identified in the EIA and Social review included, inter alia, the following: impacts to biodiversity; impacts from increased traffic on noise and air quality; disturbance and nuisance during construction; construction transport; management of the construction workforce and worker health and safety; and management of accidents and emergencies. Many of these issues are being addressed through the adoption of plans and procedures that are subject to routine monitoring and regular risk based audits of Contractors that are carried out on site.

The Project is located within or in close proximity to areas that are identified as Special Areas of Conservation (SACs) or Sites of Community Importance (SCIs) under the Habitats Directive 92/43/EEC or classified as Special Protection Areas (SPAs) under the Birds Directive 79/409/EEC (Natura 2000 sites) and the pipeline passes through parts of Wolin National Park. Natura 2000 impacts have been assessed in the local EIAs for the individual Project components but there was limited cover of cumulative impacts and information required for an adequate impact assessment are scattered throughout EIA documents and supplementary documents including Decisions from the competent authority. As a result a Biodiversity Management Plan was developed and disclosed. The project is now achieving a high level of compliance with the BMP.

The LNG project falls under the Seveso Directive 82/501/EEC; emergency plans for the event of major accidents are to be prepared as part of the operational plans for the project.

The Project has designated a Community Liaison Officer (CLO) to proactively engage with local stakeholders on Project progress, job opportunities and be responsible for handling complaints. An updated Stakeholder Engagement Plan will be required to be maintained and provide a programme of future consultation activities.

Environmental or social opportunities

The LNG terminal will allow the import of LNG and the supply of the gas to increase natural gas usage in Poland. The project will also contribute to the local economy through annual taxes and local employment opportunities. In addition it will provide compensation through the decision and permit obligations.

Summary of Environmental and Social Action Plan

Progress on the implementation of the ESAP that was publicly disclosed in 2010 was reviewed during the 2012 due diligence of the project and many actions were found to have been addressed and implemented. As a result a revised ESAP will be disclosed to reflect the current status of works and the risks relating to the construction and operation phases. Issues included in the ESAP include:

• Implementation of a Biodiversity Action Plan
• Process Safety and Emergency Response
• Contractor Management
• Maintenance of a Stakeholder Engagement Plan including a public grievance mechanism.
• Implementation of a Worker Management Plan including: a Code of Conduct; training; medical provisions and a grievance mechanism.

The Bank will monitor the Project through reviewing monitoring reports and monitoring visits, as appropriate.

There is an Environmental and Social Impact Assessment available for this project.

Technical Cooperation

None.

Company Contact

Sebastian Bawankiewicz

Tel. 022 589 84 11
E-mail: informacja@polskielng.pl

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