Poland and Denmark have made a final decision to carry out the construction of Baltic Pipe, a key energy infrastructure project that is set to reduce Poland’s dependence on Russian gas imports, investor companies Gaz-System and Denmark’s Energinet said on November 30.
Construction is currently expected to begin in 2020 and finish in 2022, the year Poland’s long-term gas supply contract with Russia’s Gazprom expires. There is a healthy enough market interest in the project, Gaz-System said in October.
Baltic Pipe will link Norwegian gas fields operated by state-controlled oil and gas company PGNiG to Poland via Denmark. The pipeline will have the capacity to pump up to 10bn cubic metres (cm) of gas annually, possibly bringing Poland’s imports from sources other than Russia to 17bn cm a year.
"The construction of Baltic Pipe will not only benefit consumers in Poland and Denmark but will also be beneficial to both countries. The new gas interconnector will further strengthen and integrate the European gas market. Moreover, Baltic Pipe may contribute to achieving European climate goals,” said Thomas Egebo, CEO at Energinet, in a statement.
Poland consumes about 16bn cm of gas annually – with most currently imported from Russia – but has long been suggesting that it will not renew the Gazprom contract.
Poland has accused Gazprom of abusing its market position in the CEE region. Warsaw is also worried that the planned pipeline Nord Stream 2, set to link Russia directly to Germany via the Baltic Sea, will allow Moscow to manipulate supplies to Ukraine and Poland for political gains.
Poland also has an import contract with Qatar and is buying gas from the US. Both the Qatari and US gas are arriving in Poland via the LNG terminal in Swinoujscie that went online in 2016.
The cost of Baltic Pipe is estimated at €1.6bn-€2.2bn.