Poland Leads the Way: Ending Dependency on Russian Gas

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Poland Leads the Way: Ending Dependency on Russian Gas

Mon, 06/27/2022 - 12:27
The flag of Poland in the sky (© Adobe Stock/FOTOWAWA)
The flag of Poland in the sky (© Adobe Stock/FOTOWAWA)

Vladimir Putin's ongoing invasion of Ukraine continues to roil global energy markets with particularly profound implications for the European gas sector.

With Nord Stream 2 in mothballs, Nord Stream 1 shipping significantly less gas and Poland and Bulgaria cut off from Gazprom imports, new forces have been generated which seem likely to irreversibly change the fundamental supply - demand relationships in the EU.  Indeed, Industry insiders widely expect Russian exports to Europe to fall from currently around 200 billion cubic metres (7. 7 trillion cubic feet) to between 50 billion cubic meters (bcm) and 75 bcm by 2030.

To compensate for lost Russian imports, Poland, for example, is quadrupling its gas import capacity with a pipeline from Norway -- dubbed Baltic Pipe -- and an LNG terminal. It could soon be able to help out Berlin, scrambling to replace its own Russian gas.

Baltic Pipe is slated to become operational in October, alongside extensions to a liquefied natural gas (LNG) import terminal in Swinoujscie, northwest Poland. "In these severe times this is a very timely project," Torben Brabo, CEO of Energinet Gas TSO — the Danish national transmission system operator for electricity and gas — told Deutsche Welle.

The new pipeline is a joint venture between Polish firm Gaz-System and Danish firm Energinet and estimated to cost between €1.6 billion and €2.1 billion ($1.9 billion and $2.5 billion). It will be an offshoot of the existing Europipe II pipeline from Stavanger in Norway to Dornum in Germany on the North Sea bed.

Poland’s state-owned gas grid operator Gaz-System says the new pipeline's capacity has been booked up to 80% and there is enough time to get that up to 100% before demand begins climbing back up in the cold season.

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