Świnoujście as an opportunity for fertilizers manufacturers

| Polish Market |

The construction of Polish LNG (liquefied natural gas) terminal is Świnoujście is under way. The launch of this unit will mark a new beginning for Polish enterprises which rely heavily on natural gas supply for their manufacturing processes. The terminal is set to open in 2014.

Demand for fuel

Currently the vast majority of natural gas used in Poland is imported, with over 10 billion cubic meters coming from foreign providers and over 4 billion cubic meters coming from domestic sources in 2011. Average demand for this resource is about 14 billion cubic meters annually. Most of this supply is used by the Great Chemical Synthesis plants. “PUŁAWY” in the largest single user of LNG, requiring about 1 billion cubic meters of this fuel.

Świnoujście as an opportunity for Polish fertilizers manufacturers/fot. freepik.comTurn on new taps!

The launch of LNG terminal is Świnoujście opens up the possibility to import gas from countries other than Russia. One such supplier is Qatar. Diversification of gas supply sources is not only profitable from the financial point of view, but also when the competitiveness of the Polish chemical companies is taken into consideration. This becomes apparent upon realizing that natural gas is the key resource in the manufacturing process. Price of gas constitutes 57% of ammonia production cost and as much as 83% of production cost of ammonium nitrate. Independent from Russian Gazprom, Polish companies would be able to manufacture good quality products using cheaper resources. Consequently, it will be less likely that domestic chemical companies will go out of business due to competition from Eastern manufacturers, which offer cheaper products thanks to access to cheap natural gas supply.

Świnoujście as an opportunity for Polish fertilizers manufacturers/fot. freepik.comGas and Polish agriculture

Decrease in the manufacturing cost of fertilizers is essential for domestic agriculture as well. Not only will the fertilizers producers benefit, but the farmers and Polish consumers will pay less. However, as long as Polish gas importation system remains underdeveloped, “PUŁAWY” and other enterprises from the sector must wait for the LNG terminal launch. Once the unit in Świnoujście becomes operational, it will be possible to make use of alternative offers of purchasing the fuel from cheaper sources. Time will show whether 2014 brings a breakthrough for the Polish economy. We in “PUŁAWY” surely hope this will be the case.