Polish-Czech gas links growing

By bne IntelliNews April 15, 2013

bne -

Poland and the Czech Republic are moving forward on a plan to build another interconnector to link their gas pipeline systems, an official from Polish network operator Gaz-System said on April 11.

Speaking to wnp.pl, head of international projects for Gaz-System Pawel Sek said that the project, first reported to be under discussion with Czech peer Net4Gas in May 2012, would offer a huge boost in capacity from the current link between the two countries' networks.

The Stork pipeline, opened in 2011, offers just 0.5bn cubic metres per year (cm/y). The proposed new pipeline would be able to transfer up to 10bn cm/y from the Czech Republic to Poland, with a capacity of 5bn cm/y in the opposite direction. "Interest in the current gas connection between Poland and the Czech Republic... is very high," Sek said. Much higher than its technical capabilities. Therefore, work is underway on the expansion of connections."

Set to cost around €214m, the planned "Moravian interconnector" would be approximately 100 kilometres long and connect south central Poland with North Moravia, in the east of the Czech Republic. Falling under the EU's North-South Gas Corridor project, Brussels has pledged to pay 31% of the costs.

It's the latest in a series of projects planned to create a cross-border gas pipeline network in Central Europe, including interconnectors linking Poland to both Lithuania and Slovakia, as well as a scheme to then link Slovakia to Hungary. Under the auspices of the EU project, countries in the region are attempting to diversify their supply options away from the current heavy dependence on Russia.

Meanwhile, Gazprom is pushing to expand its own export capacity to the region, and last week made a big fuss about resurrecting a plan to run a pipeline (Yamal-Europe II) through Belarus and into Poland, which would then extend to Slovakia and Hungary. Warsaw angrily rejected the suggestion, while it's likely that the announcement from Moscow was primarily aimed at Ukraine - with which Russia is in the midst of a long-winded gas row - rather than expanding export capacity into Europe, which is already almost twice annual demand.

The original plan on the project was to launch construction in 2017. The Gaz-System official did not comment on that date, but explained that the initial stages of the project are finished. "We have planned the route of the pipeline," Sek told the portal. "Soon we will proceed to the design phase, along with the procedures for obtaining permits, including building permits and environmental decisions. Once the project is ready to implement it will be presented to the market. In order to make an investment decision we must assess the real level of demand for the transmission capacity offered. In addition, we need to consider issues related to security and diversification of supply."

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