News // Politics
Poland turns to Norwegian gas to trump Russia
24 October 2016 , 00:01Neftegaz.RU1106
Increased tensions with Russia over its plans to build the Nord Stream 2 gas pipeline to Germany is pushing Poland to revive a stalled pipeline project with Norway.
Warsaw’s main goal is to find other gas suppliers when its current contract with Russia’s Gazprom expires in 2022.
«We are going to replace supplies from the east with other sources,» Piotr Naimski, an MP in charge of strategic energy infrastructure at the Polish prime minister’s office, said at an event organized in the European Parliament in Brussels. «Our government is not eager to extend this contract.»
The development highlights Central and Eastern Europe’s ongoing struggle to unshackle itself from long-term contracts with the Russian energy giant, which have left countries in the region vulnerable to supply disruptions.
The region, together with the European Commission, has been very critical of Russia’s Nord Stream 2 project, which would see Gazprom double its pipeline capacity to Germany under the Baltic Sea, bypassing the traditional route across Ukraine. The fear is that Russia would use its gas clout as a political weapon.
That has the Poles looking to the North Sea.
«This is in competition with the Nord Stream 2 project,» Naimski said. «The most important for us in Poland is to proceed with the idea of our own project and persuade our neighbors to diversify supplies.»
The proposed project, which was first discussed at the end of 1990s, would ship gas from the Norwegian continental shelf to Poland via Denmark.
It would consist of a new pipeline between Denmark and Poland, known as the Baltic Pipe, and an infrastructure upgrade between Denmark and Norway. This is part of Warsaw’s larger energy security plan known as Northern Gate, which also includes the country’s new liquid natural gas terminal that began operations this summer. It has a capacity of 5 billion cubic meters of gas a year.
The pipeline would transport up to 10 billion cubic meters of gas, about the same as Poland receives from Russia today, accounting for about three-quarters of the country’s gas needs.
This is the third effort to bring the project to life. A contract for the Danish-Polish leg of the deal was signed in 2001, but was shelved shortly after a more pro-Russian government came to power in Poland. The project was revived once more in 2007, but without success.
Norway said it is open to the idea, although it said existing capacity is enough to handle gas flows.
«A new pipeline is not necessary to manage gas exports,» Oda Helen Sletnes, Norway’s ambassador to the EU, said at the same parliamentary event.
Norway supplies about a quarter of the EU’s gas, most of it to Germany, the U.K., Belgium and France.
A large share of Norway’s untapped gas resources is located in the High North area of the Barents Sea. The industry is expected to decide over the next years whether the fuel should be exported as liquefied natural gas to various world destinations or sent through pipelines to Europe.
«To use the pipeline option, the industry needs strong signals from the European market,» Sletnes said. She warned that the project would «need to be commercially viable.»
Norway wants to avoid investing in expensive infrastructure that won’t be needed.
But Polish officials reassured that Central and Eastern Europe, as well as the Baltic region, are the only EU areas where gas demand is expected to rise in the next years.
Naimski said the plan would be to see gas flowing through the new corridor by 2022, at the same time that Poland’s Gazprom contract expires.
«By 2019 we would like to reach a no-return point for the project,» he said. «We really need to be fast.»
Brussels has already selected the proposed Polish-Danish interconnection as one of the EU’s priority infrastructure projects, making it eligible for EU funding. Baltic Pipe is currently undergoing a feasibility study. The results, expected by the end of this year, will give the industry a better picture of how much the entire project would cost.
The Commission is looking to see if it can give the project «strategic assistance,» said Maroš Šefčovič, the Commission vice president in charge of energy union.
Šefčovič said Central and Eastern Europe and the Baltic countries pay 16 to 24% more for gas compared to Western European countries — coming to an extra €1.3 billion a year.
«This time we should not let this opportunity slip outside of our hands,» he said. «Let’s hope the third time is really lucky.»
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