Plans to Ship Norwegian natural gas to Poland resurface

Source: Heren

2014/09/24

Plans to ship Norwegian natural gas to Poland are once again coming to the fore, ICIS understands. Two proposals are believed to be on the table, both of which utilise infrastructure within Denmark as a bridging point to the planned Baltic Pipe.

Polish system operator GAZ-SYSTEM has prepared two plans to connect Norway and Poland by 2022. A source said the transmission system operator (TSO) has been instructed to draw up these plans by the Polish government as they seek to find alternate sources of supply. Poland currently has a supply contract with Russian giant Gazprom, which is set to end in 2022 and accounts for a large part of the country’s supply. In addition Poland is seeking to diversify supply through an LNG terminal and build stronger links with Germany ( see ESGM 19 Jun 2014 ).

The first option is smaller scale, with €400m required. This would involve a tie-in between the Norwegian Statpipe and Danish North Sea gas fields. This means Norwegian gas could enter existing Danish infrastructure before entering the proposed Baltic Pipe in eastern Denmark and travelling to northern Poland. This strategy could see around 3-4 billion cubic metres (bcm)/year of Norwegian gas enter Poland.

The alternative option would require billions of euros, a source told ICIS. It would involve a new pipeline being constructed linking fields in the Draupner and Sleipner area of Norwegian North Sea with the Danish landing point at Nybro. This would mean upwards of 10bcm/year going through the Baltic Pipe and the Danish grid would need to be upgraded to accommodate the larger flows.

The Danish TSO, Energinet.dk, is open to both solutions. Its head of development, Soren Juel Hansen, said that this new supply “could alleviate the current dependency on a single dominant, external supplier” in addition to improving competition and integration in central Europe. Hansen also said that Energinet.dk is open to either solution and that the development could also be used to supply Sweden and Germany.

GAZ-SYSTEM was unavailable for comment.

The idea of supplying Poland with Norwegian gas has been talked about since 2000, a source told ICIS. The Baltic Pipe was abandoned in 2009 after it received limited commercial interest ( see ESGM 17 June 2009 ). The same reason also led to the suspension of the Skanled project, which would have connected Norway to the rest of mainland Scandinavia.

Renewed interest from the Polish government looks to have revived both projects. Although it is understood that GAZ-SYSTEM is yet to present its plans to Norwegian counterparts. But ICIS understands the Norwegians have become more open after initially being against the project when it was first abandoned.

In addition to dialogue with Norwegian partners, each solution is likely to undergo a cost-benefit analysis from the EU and feasibility studies. Thomas Rodgers