Czechia pushes for more connections to LNG terminals

Czechia pushes for more connections to LNG terminals
“We cannot make the same mistake as our predecessors in office who did not care about energy security”, said Czech Prime Minister Petr Fiala. / bne IntelliNews
By Albin Sybera September 8, 2022

Czech premier Petr Fiala (ODS party) and his Polish counterpart Mateusz Morawiecki (PiS) have announced the resumption of work on the Stork II pipeline bringing gas from the Polish LNG terminal at Swinoujscie to Libhost in Czechia’s northern Moravian region.

Premiers of both countries made the announcement during the economic forum in the Polish spa city of Karpacz near the Czech border and stressed that Stork II will contribute to greater energy security in Central Europe.

“We cannot make the same mistake as our predecessors in office who did not care about energy security”, Fiala was quoted as saying by the Czech Press Agency, and he praised the recent opening of the pipeline connecting Poland and Slovakia.

Plans to restart the works to landlocked Czechia were announced already in May following the Russian invasion of Ukraine.

The project was shelved by the previous cabinet of Andrej Babis (ANO). Czech ex-premier Bohuslav Sobotka (Social Democrats) has recently accused his successor Babis of deliberately derailing the Stork II project in concert with Czech president Milos Zeman, known to be a long-term Russia supporter, to maintain Czechia’s high dependency on Russian imports.

Fiala also announced this week that he is to attend Thursday’s opening of a new floating LNG terminal in the Netherlands which could provide up to 30% of annual gas consumption in Czechia.

Earlier this year Czechia’s majority-state-owned energy utility CEZ rented out capacity in the Dutch LNG terminals. According to the current gas reserves and the new LNG links, Czechia can probably last until March without imports of Russian gas.      

Czechia has pipeline connections to Germany providing infrastructure from the west and south but no infrastructure to the north.

Some 90% of gas has been coming from Russia, making Czechia one of the most energy dependent countries on Putin’s regime.

The Czech energy market has been for years dominated by the majority-state-owned utility CEZ and private conglomerates producing and distributing energy: EPH of billionaires Daniel Kretinsky and Patrik Tkac, and Sev.En of controversial coal tycoon Pavel Tykac. 

As the energy crisis deepens, calls have mounted for a greater increase of renewable resources in the energy mix, the introduction of an energy windfall tax, or nationalisation of CEZ, all ideas that the three big energy companies have been resisting. 

Mirek Motejlek, editor and manager of the business insider website, referred to EPH and Sev.En as masters of the energy crisis. “PT (Pavel Tykac) and DK (Daniel Kretinsky) did it”, he wrote on Facebook on Tuesday, and added they “obtained cheap loans, got no windfall tax and enough room in [the Czech price] cap to be no. 1 and no. 2 in Forbes [personal wealth index for the Czech Republic]”.

On Sunday Czech Minister of Industry and Trade Jozef Sikela (STAN) confirmed that EPH and Sev.En will receive state loans to cover their energy trading deposits.