Poland is to invest PLN 1.9 billion ($475.9 million) in the expansion of its ?winouj?cie liquefied natural gas (LNG) terminal.

Polskie LNG, a division of national grid operator Gaz-System, announced the project on Thursday to expand the terminal’s regasification capacity to 8.3 billion cubic metres per year (Bcm/y) — an increase of 3.3 Bcm/y. The expansion is due to be completed by the end of 2023.

An agreement between Polskie LNG, the Szczecin and ?winouj?cie Seaport Authorities, and construction firms Porr and TGE Gas Engineering was signed on Wednesday.

Under the terms of the agreement, Polskie LNG is responsible for the construction of a new LNG tank, with a capacity of 180,000 cubic metres, and the operation of a new LNG berth to be used for bunkering, loading and unloading.

Meanwhile, the Szczecin and ?winouj?cie Seaport Authorities will construct the hydrotechnical section of the LNG berth, hydrotechnical infrastructure for the transmission pipe rack and complete mooring infrastructure.

Polish government officials labelled the expansion as a “crucial” part of Poland’s strategy to diversify its domestic energy supply and increase its production in the Baltic Sea region.

“The national transmission system is consistently expanding to switch from the presently prevalent east-west direction of supply to the northern direction,” said Piotr Naimski, Secretary of State in the Chancellery of the Prime Minister, Government Plenipotentiary for Strategic Energy Infrastructure.

“Apart from the expansion of the LNG Terminal in ?winouj?cie, Gaz-System Capital Group has been successfully pursuing a number of strategic investment projects such as the Baltic Pipe Project, the North-South Gas Corridor or the Poland–Lithuania gas interconnectors,” he added.