CEZ Abandons Planned Polish LNG Terminal Capacity Over Disputed Conditions

(Reuters) — Majority state-owned Czech utility CEZ has shelved a plan to secure capacity for LNG at a new Polish terminal because it was unhappy with the conditions offered, two sources with knowledge of the matter told Reuters.

The decision could raise questions about the project's viability as Polish pipeline operator Gaz-System has previously said a final decision on the unit would depend on the level of interest from market participants.

CEZ, like many European companies, has been diversifying natural gas supplies. Czech imports had been almost exclusively from Russia until Moscow's invasion of Ukraine last year.

Gaz-System had asked for binding bids for future LNG capacity by Oct. 27, before it contracts a supplier for the floating storage regasification unit - a vessel that converts LNG to a gas form - to be anchored at Gdansk.

CEZ last year secured 3 billion cubic meters of annual capacity at the Eemshaven LNG terminal in the Netherlands up to 2027, representing up to 40% of Czech annual needs and easing fears of a shortage of supplies over the winter.

It had been interested in capacity in Poland, as well as at new German projects coming online in the future, but did not deem the terms offered by Gaz-System suitable and is no longer part of the process, the sources said.

CEZ declined to comment.

It is unclear which other companies might be interested in the Polish capacity, which would be available from 2028, but results of the bidding process are likely to be published this week, Gaz-System spokesperson Iwona Dominiak told Reuters.

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