Gas Trump Card: Will Poland become Europe's new energy hub
October 8, 2022
Warsaw launches promised pipeline from Norway
Gas was delivered to Europe via a new pipeline. Blue fuel from Norway gets to Poland in transit through Denmark. In Warsaw, they are going to not only provide for their own needs, but also sell the surplus. Whether the Poles will be able to carry out their plans-Izvestia looks into it.
Annoy your neighbor
"The era of Russian dominance in the gas industry is coming to an end," Polish Prime Minister Mateusz Morawiecki said at the launch ceremony of the Baltic Pipe gas pipeline connecting Polish territory with the Norwegian shelf via Denmark. President Andrzej Duda echoed him: "From here, this gas can go to where it is needed."
In early October, the Baltic Pipe gas pipeline from Norway to Poland, which transits through Denmark, was launched. This was announced by the Polish operator Gaz-System. The volume of pumping is 62.4 million cubic meters. m per day, about 10 billion cubic meters per year.
Warsaw has repeatedly stated that this pipeline will replace Russian gas — since the end of April, after Poland refused to pay for blue fuel in rubles, Gazprom's supplies stopped. Despite this, by the beginning of August, Poland's storage facilities were 100% full.
In general, according to the Association of Gas Infrastructure Operators of Europe, European gas storage facilities are now more than 85% full on average. The share of Russian fuel in the total volume of supplies fell to 10%, while the share of other sources increased: 35% of supplies are made up of liquefied natural gas, 29% - gas from Norway, 12% - from North Africa, and another 10% - from the UK.
The European Union has repeatedly tried to find alternative suppliers. The idea of building the Baltic Pipe was reviewed more than once. Initially, the future gas pipeline was discussed in 2001 — when the Polish company PGNiG and the Danish oil and gas company DONG signed an agreement on the construction of the pipeline, where one-third would belong to the Poles, and two — thirds of the shares would belong to the Danes. However, then the project was considered unprofitable from an economic point of view.
After the Munich speech of Russian leader Vladimir Putin in February 2007, this idea was revisited, but then there were problems with the financing of the project, which was estimated at €1.6 billion. However, last spring they decided to return to the project.
Take gas away from Germany
Warsaw hopes to increase pumping through the Baltic Pipe and subsequently become a new hub in Eastern Europe. Thus, the Polish energy company PGNiG plans to supply 6.5 billion cubic meters of gas from Norway, using its capabilities by 80%, and in 2024 — 7.7 billion cubic meters. m. At the same time, PGNiG will still be the only company using the gas pipeline — the parties have signed transit contracts for the period from 2022 to 2037.
The maximum capacity of the Baltic Pipe is six times lower than Nord Stream. Analysts believe that the launch of a new gas pipeline is unlikely to affect global gas prices, as well as blue fuel quotes in Europe. However, it is quite noticeable that Warsaw prepared for the energy crisis better than other EU countries.
Previously, Germany was the buyer of Norwegian gas, while Poland is a new customer of Oslo. At the same time, the Scandinavian country does not produce new volumes. In addition, the source of the Baltic Pipe is not a field, but the main pipeline Europipe II, through which gas has long been supplied to the Germans. Thus, Warsaw starts to take away what was originally intended for Berlin.
On October 6, Poland ordered the introduction of the second-highest threat regime to the country's energy infrastructure located outside its borders. We are talking about the Baltic Pipe gas pipeline. In Warsaw, they have in mind the possibility of a terrorist attack. This is a signal for the responsible services and authorities to be ready to respond in the event of such a need.
There are not enough volumes
— As for the Norwegian gas that currently flows through the Baltic Pipe, taking into account the lack of capacity, lack of resource base and the lack of additional fields that could be developed — the new pipeline will perform limited deliveries. And it will obviously not be able to compensate for Russian gas supplies — " says Natalia Eremina, Doctor of Political Sciences, Professor at St. Petersburg State University.
According to the political scientist, the Polish economy is gaining additional trump cards in its regional rivalry with Germany.
— Now Germany becomes a country dependent on Poland. Warsaw once blocked the Druzhba gas pipeline, and now it offers Berlin to buy gas from it, although it is unclear how this will be done, given that the volume of gas is already small,and Poland itself needs it. In general, the country has built the appropriate infrastructure on the Baltic Sea, thus showing that it has long been implementing a plan that would give it independence from Russian gas. Once again, we see how politics has begun to dominate the economy, defeating it. But in general, the Baltic Pipe does not solve anything in gas supplies for the EU as a whole. It solves something for Poland, but even that is quite relative — " the expert said in an interview with Izvestia.
According to Dmitry Ofitserov-Belsky, Senior Researcher at the Primakov Institute of International Relations of the Russian Academy of Sciences, the new Baltic Pipe gas pipeline has good prospects.
"Especially now. At the same time, the capacity is insufficient to meet the needs of Poland. But the country also has other sources of supply. So, Warsaw is also going to buy liquefied natural gas. So in the aggregate, the country should have enough gas. As for resale, you should not expect large volumes of resale here, " the expert believes.
He noted that Poland will supply gas to Slovakia. Construction of the interconnector began five years ago at the expense of the European Union. Initially, it was expected to be put into operation at the end of last year, but later it had to be postponed until the summer of 2022. On the Polish side, the length of the open interconnector is 60 km, on the Slovak side — more than 100 km. Its capacity is 4.7 billion cubic meters of gas in the direction of Slovakia and 5.7 billion cubic meters of fuel in the direction of Poland.
— A small resale of gas by Warsaw is still possible. But in order for Poland to become a gas hub, there are not enough volumes in Europe. Gas can be purchased directly, and Poland will simply be the territory through which it will be transported. The Baltic Pipe gas pipeline was built exclusively for Poland and some other countries. When he thought about it, Poland was not yet going to give up Russian gas. The hub option would be possible if it were possible to combine all three sources, including Russian and Norwegian liquefied natural gas, " Polonist believes.
The expert noted that the Germans will be able to survive this winter, but it is very difficult to focus on gas from storage facilities.
— The amount of Norwegian gas that will be delivered to Germany — and we are talking about LNG-depends on how much gas Germany can pump and simply take into its storage facilities, as well as on the ability to charter tankers. The fact is that when the storage is 80 or 100% full, the gas is easy to extract. But when it is already 20-30% full, extracting it is quite problematic. And the Germans will definitely face this problem — " the political scientist believes.