Poland's Synthos prefers coal to gas for Pulawy plant

WARSAW, July 4 Wed Jul 4, 2012 11:29am EDT

WARSAW, July 4 (Reuters) - Polish synthetic rubber producer Synthos, which wants to acquire local fertiliser maker Pulawy, said on Wednesday it plans to switch the fuel for Pulawy's planned 850 megawatt power plant from gas to coal to cut costs.

"We want to carry out the investment in the power plant in Pulawy, but we want to introduce one modification concerning the fuel. We do not want to use more gas, we want coal," Synthos Chief Executive Tomasz Kalwat told a parliamentary committee.

Poland already produces around 90 percent of its energy from coal, which puts it at odds with the European Union over carbon pollution. The alternative is to run on gas, which the country buys almost entirely from Russia at high import prices.

Government hopes are pinned on Poland's shale gas deposits, which state-controlled companies are working hand-in-hand to try to develop, but it will take time for gas to flow.

Kalwat suggested miner Bogdanka, based about 65 kilometres east of Pulawy near the Ukrainian border, could deliver coal to the plant. "We know where Bogdanka is located, we believe in the future of the power sector based on coal."

Synthos, controlled by one of Poland's wealthiest citizens Michal Solowow, has offered 102.5 zlotys for each Pulawy share in the first 12 days of the bid starting on July 9, after which the offer drops to 98.85 zlotys.

State-controlled Pulawy holds a 50 percent stake in the company tasked with building the power plant. Poland's top utility PGE holds the other 50 percent, with the partners hoping to launch the operation in 2016 or 2017. ($1 = 3.3301 Polish zlotys) (Reporting by Pawel Bernat; Writing by Maciej Onoszko; Editing by David Holmes)

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