Although prior to the collapse of the Soviet Union Poland was formally sovereign, being a satellite state meant its economic and foreign policy was actually controlled by the Soviet Union. The fall of the Iron Curtain in 1989 meant Poland could finally decide the fate of its geopolitical orientation.
Since 1989, Polish foreign policy has had three main pillars. The first one is navigating towards and deepening transatlantic relations embodied in the relationship with the North American Treaty Organization (NATO) and the United States of America. The principal foundation of this pillar is maintaining the commitment of the United States towards European, and thus, Polish security. The second pillar is European integration, which meant joining the European Union (EU) and deepening ties with its member states. The last of such pillars is the focus of Poland on its eastern neighborhood. As the war in Ukraine is demonstrating or the orchestrated migration crisis at the Belarusian border has shown, the eastern neighborhood offers the most significant challenge and danger to Polish security. Ultimately, the three pillars complement one another and are applied simultaneously. Accompanying the three pillars of Polish foreign and security policy is the matter of energy security, which means having reliable, affordable, and sufficient levels of energy to sustain the economy and households.
Why build an LNG terminal?
Stemming from historical consequences and the strive to decrease dependence on Russian energy, namely natural gas, the first of such ambitions was born in 1990. It was during these years that the first concept of building a terminal on the Polish coast for receiving liquefied natural gas (LNG) was prepared. The idea was to be able to receive non-Russian gas and thus diversify gas supplies. The slowing down of economic growth, however, meant that the plan was ultimately postponed. The fulfillment of the Yamal contract with the Russian Federation convinced governments that getting gas from other importers was unnecessary. It was only in 2005, with the signing of a contract for the building of the Nord Stream Pipeline by German and Russian companies that Poland’s energy security policy changed. The signing of the contract for the North Stream project threatened Polish interests and plans. First of all, the Nord Stream pipeline directly connected Russia with Germany, thus bypassing transit countries like Poland. This not only deprived Poland of transit fees but also planted an idea of uncertainty over scenarios if the Yamal Pipeline were to be placed offline for some reason. Second, the underwater pipeline endangered, at the time hypothetical, plans to interconnect Poland with Denmark for the ability to purchase Norwegian gas. Despite postponing earlier plans to diversify away from Russian gas, the idea of executing the plan has not been discarded. The newly built pipeline by Germany and Russia meant that building a new pipeline between Poland and Denmark would need to take into account additional matters. And, ultimately, the pipeline also decreased the safety of navigation to and from the ports in Szczecin and Świnoujście.
At the same time, in 2005–2006, there was a gas conflict between Russia and Ukraine, which saw the halting of gas deliveries to customers in the EU, including Poland as well. The conflict erupted over payments for deliveries, as well as the diverting of gas that was meant to be supplied to Europe. It became clear that Russia is willing to use energy as a geopolitical tool. It was because of the high dependence on Russian gas imports, accompanied by the concerns caused by the signing of a contract for the construction of the Nord Stream Pipeline and the effort to prevent future cutting of deliveries that Poland was given a wake-up call about its energy security. Therefore, it is for such reasons that Poland decided in 2005 to restart the planning of a project to build an LNG terminal on its coast. The goal was to decrease Poland’s dependence on gas imported from Russia by increasing the imports of non-Russian gas. Poland has formally decided to build an LNG Terminal.
About the Świnoujście LNG Terminal
In the summer of 2006, Poland’s government commissioned PGNiG, the national gas and oil corporation, to build a terminal. This meant planning and overseeing the implementation of such plans. PGNiG had to decide between Gdansk and Świnoujście as the location of the terminal. In the end, the decision fell on the latter as tanker ships would need to travel less, meaning the cost of travel is lower. In addition to the strategic importance of building the LNG terminal, the government also set out to secure long-term LNG supplies. In 2009 a long-term gas deal was signed with Qatar, agreeing to 1.5 billion m³ of deliveries for 20 years that begin in 2014. Since then, Poland has been consistently receiving deliveries from Qatar, receiving a symbolic 100th delivery in May 2022. Poland has also signed long-term gas deal contracts with American companies, such as Sempra Energy or Venture Global LNG. The total value signed by US companies currently stands at around 9 billion m³.
Poland consumes more than 20 billion m³ of natural gas yearly. The consumption of natural gas is expected to increase further year on due to the growing demand caused by economic growth, and the energy consumed during the transition from non-renewable sources, such as coal. Of the 20 billion m³, 4 billion m³ is from Poland’s own domestic production of natural gas. Until the end of April 2022, about 10 billion m³ of natural gas was imported from the Russian Federation through the Yamal Pipeline. The remaining amount was transported through the Świnoujście LNG Terminal. The growing demand for natural gas means Poland is upgrading the capacities of the terminal in Świnoujście, as well as investing in new ones. Today, the terminal can handle 6.2 billion m³ of gas yearly. The amount is going to increase to 8.3 billion m³ once the expansion of the terminal is finished at the beginning of 2023. Furthermore, Poland is planning the construction of a Floating Storage and Regasification Unit (FSRU) terminal near Gdansk on the Baltic Sea. The terminal will be able to unload, process, regasify and store natural gas. The terminal was initially planned to have a yearly capacity of 6.1 billion m³, however, Polish Minister of Climate and Environment Anna Moskwa stated the amount was doubled due to high demand from neighboring states such as the Czech Republic and Slovakia.
In April 2022, after refusing to pay for the import of gas in Rubles, the Russian Federation suspended gas deliveries to Poland through the Yamal pipeline. The next month, Poland invalidated the agreement, which is set to officially expire at the end of 2022. The Yamal contract was first signed in 1993 and was renewed afterward. As energy analyst Maciej Zaniewicz at The Polish Institute of International Affairs notes, the Yamal contract was Poland’s worst energy deal ever. First of all, the contract prohibited Poland from re-exporting the gas, thus making it harder to coordinate energetically with countries in the region. Second of all, the price of gas was linked to that of oil, meaning Poland did not pay a market price for the raw material resulting at times in costlier deliveries. Following the withdrawal from the contract, Anna Moskwa emphasized the action does not affect exports to Germany via the same pipeline. Poland’s decision to leave the contract only a few months before the official termination period has not come as a surprise, as the country already indicated in 2019 that it has no plans to renew the contract after its expiry. Instead, Poland will replace and import the amount from Norway via the Baltic Pipe. The pipeline connects Norway with Poland via Denmark and will come into service in October 2022. Once operational, the pipeline will transport 10 billion m³ to Poland each year, replacing the quantity previously imported via the Yamal pipeline. The LNG Terminal in Świnoujście and the Baltic Pipe, as well as the FSRU unit being built in Gdansk, contribute to Poland’s ability to diversify imports of natural gas, thus decreasing dependence on Russian gas. In fact, with the halting of gas deliveries through the Yamal pipeline to Poland, the country is not importing any more raw materials from Russia.
LNG imports, on the other hand, are rising. As the Energy Policy of Poland until 2040 estimates, the LNG market will expand, thus its imports will increase, as well as its overall share in gas usage. For example, in May 2022 Poland imported a record quantity of LNG through its terminal in Świnoujście. Complementary to the strategic development of the LNG terminals, to further increase the amount imported, but also to secure shipments, Poland has also ordered gas tankers (LNG carriers). These tankers will be chartered by PGNiG from Knutsen OAS Shipping and the Maran Gas Maritime shipping companies. Overall, PGNiG will have 8 such tankers at its disposal, with two of the vessels entering service in 2023. 2024 will see the delivery of another two carries and in 2025 the remaining four. Since the contracts for LNG shipments from the United States are FOB (free on board), PGNiG will be able to decide whether to resell the imported gas or transport it home upon receiving it.
What does the LNG terminal Świnoujście mean for Poland?
By having more gas suppliers and investing in infrastructure for its delivery, Poland ultimately reduces the likelihood of major disruptions in the case of a reduction in one of its imports. In other words, by having various suppliers, Poland is creating a safety net for its energy security should there be a cut in one of them. As the global energy crisis rages, especially in Europe, many countries are rushing to find alternative natural gas supplies to increase imports to fill gas storage for the winter. For example, if Poland had not diversified its suppliers in time, the halting of gas deliveries from Russia via the Yamal pipeline would have hurt Poland significantly more. The elimination of dependence on Russian gas also means Poland is free from any blackmail over the halting of deliveries. This gives Polish diplomacy a bigger weight, a better position at the table, as well as more room to maneuver in its foreign policy.
In addition to reducing dependence on Russian gas and decreasing threats of gas shortages, the LNG terminal in Świnoujście also allows Poland to emerge as a regional gas hub. This essentially means that Poland will have a crucial role in the distribution of gas to neighboring states, contributing to efforts to decrease or even phase the import of Russian gas. To achieve becoming such a hub in the region, Poland needs to further increase the capacity of the terminal in Świnoujście. Ultimately, the more capacity that LNG Poland can provide, the larger its role in the region. All of the above also means that Poland is a driving force in the REPowerEU plan of the EU, which seeks to end the dependence on Russian fossil fuels while working towards the EU’s climate goals.
What does the LNG terminal Świnoujście mean for the region?
Being the region’s sole port of this capacity, the terminal in Świnoujście, and later in Gdansk, will be able to increase the energy security of neighboring states as well. The latter is important for various reasons. First of all, it allows neighboring states to import LNG, or regasified gas, from Poland, thus diversifying their supply of gas. Second, by enhancing energy cooperation with the Central and Eastern European (CEE) region, one of the most prominent goals of the Three Seas Initiative (3SI) can be achieved. This energy cooperation ultimately focuses on reducing dependency on Russian gas. This means through the deliveries and reselling of non-Russian gas to neighboring states, Poland is playing a key role in contributing to the diversification of gas supplies. The collaborative effort that the 3SI seeks to create is a North-South Gas Corridor that aims to link the gas pipelines in the region, from the LNG terminal in Świnoujście to the one in Krk, Croatia. The creation of a new axis not only aims to decrease the dependence on the East-West axis which has created and symbolizes the reliance on Russian gas but also increases the interconnectedness of the CEE region. Today, the countries in the CEE region are much less interconnected than their western allies. Increasing interconnectivity in the CEE region, not only in energy but also in transportation and economy, means that the region’s development will also be less dependent on the development of allies in the West. To increase interconnectivity in the CEE region, Poland is working on the development of interconnectors with the Czech Republic, Lithuania, and Slovakia. The goal is to create the ability to distribute excess gas to immediate neighbors.
One of the prominent projects to increase interconnectivity is the construction of the Poland – Slovakia Gas Interconnector. Once operational – which is scheduled for the second part of 2022 – the interconnector will have a capacity of 4.7 billion m³ per year towards Slovakia, and 5.7 billion m³ towards Poland. The interconnector is significant, as it will not only be one of the backbones of the North-South axis but will also reduce Slovakia’s dependence on Russian gas. Being one of the most dependent on raw materials from Russia, the pipeline gives Slovakia a great opportunity to diversify the import of gas. The latter also means that Poland’s role in doing so increases.
The so-called Stork projects, the Czech-Polish interconnectors are another set of ambitious plans. The first Stork project was finalized in 2011 when the Czech-Polish interconnector officially became operational. The project was a big step toward creating the North-South gas corridor and increasing the energy security of the respective countries. However, talks have been stalling for years about Stork II, which intends to further increase interconnectivity between the two states. In April 2022, Poland and the Czech Republic agreed to restart previously stalled negotiations on building the Stork II gas pipeline. The Czech Republic also expressed its interest in securing capacity in the Świnoujście terminal or the FSRU unit being built in Gdansk. Securing imports from either would contribute significantly to the diversification of Czech gas imports.
The gas interconnectivity between Poland and Lithuania, the GIPL, started operating in May 2022. Prior to the completion of the pipeline, the three Baltic states and Finland were not part of the EU’s gas transmission system. This essentially meant that Lithuania, Latvia, Estonia, and Finland could only import natural gas from Russia, resulting in high dependence. With the completion of the GIPL, Lithuania, along with the other Baltic states and Finland, is now an integral part of the EU’s gas market through interconnected pipelines. This allows the aforementioned countries to diversify their gas imports, thus decreasing their dependence on Russian gas and increasing energy security. Lithuania, for example, has fully stopped importing gas from Russia in April 2022 and is instead satisfying all of its gas consumption through LNG imports to its terminal in Klaipeda. The GIPL can further strengthen the energy independence of Lithuania, as any delayed LNG shipment can be replaced. Since becoming independent of Russian gas, the number of Foreign Direct Investments in the country has risen.
The strategic decision to construct and expand the Świnoujście LNG terminal is starting to pay off for Poland. On the one hand, it serves as a crucial lifeline since the halting of the gas supplies from Russia and helps to achieve the long-time aspiration of becoming independent from Russian gas. This increased Poland’s energy security and gave its foreign policy the ability to navigate without fear of being blackmailed over the stoppage of deliveries. Second, the terminal made Poland the backbone of the EU’s REPowerEU initiative by contributing to the effort of neighboring states to diversify gas supplies. The Świnoujście LNG terminal is therefore the gateway for Poland for increasing energy security and becoming a regional gas hub. The work, however, is far from over.
 Kamola–Cieślik, Małgorzata. “LNG Terminal in Świnoujście as an Element of Poland’s Energy Security.” Polish Political Science Yearbook 44, no. 1 (2015): 268–82. https://doi.org/10.15804/ppsy2015018.