Poland aims to break Russian gas grip

Poland aims to break Russian gas grip

Poland’s strategic energy chief says Warsaw intends to stop buying Russian gas after the country’s long-term supply contract with Gazprom runs out in 2022.

Piotr Naimski told state-run broadcaster Polish Radio: “Poland will not extend the contract. New possibilities will appear.”

The “Baltic pipe” linking Poland with Norway via Denmark as the Central European country attempts to diversify gas supplies.

Poland was also signing contracts for the purchase of LNG (liquefied natural gas) from the US and Qatar, Naimski added.

Poland currently buys about 11 billion cubic metres (bcm) of the 17 bcm of natural gas it consumes each year from Russia’s gas giant, Gazprom.

There are questions about whether the Baltic pipe between Norway and Poland will be ready by the time Poland’s Gazprom contract expires in 2022. One complication is that Poland’s pipeline will have to cross the rival Russo-German Nord Stream 2 pipeline under the Baltic Sea after Poland has fought to prevent it being built.

“The crossing with Nord Stream 2 is very important,” said analyst Robert Tomaszewski of Polityka Insight in Warsaw. “Gaz-System needs to strike an agreement with Gazprom on this. It’s a technical discussion, but I can imagine a situation in which Gazprom could postpone this or make this whole process take longer.”
Poland’s government is also considering the impact of Nord Stream 2 pipeline when it is due to open this year, bypassing Ukraine and Poland.

Kay-Olaf Lang of the German Institute for International and Security Affairs told DW that Poland saw the Nord Stream 2 pipeline as a symbol “of German disloyalty towards its eastern neighbour and of a special relationship with Russia”.

Gazprom aims to complete Nord Stream 2 before 2020 when its gas-transit deal with Kiev runs out and Poland reportedly believes that when Russian gas no longer has to travel through Ukraine, the country will be more vulnerable to further Russian aggression.

Poland’s Gaz-System and Danish Energinet agreed to proceed with their Norwegian gas pipeline in November.

Work on the Baltic pipe is due to start next year and end by October 2022, according to Polish Radio
Poland’s nationalist Law and Justice party has said it does not intend to renew its contract with Gazprom in 2022, blaming supply disruptions over the last 15 years.

In December, PGNiG, Poland’s state-owned oil and gas utility, signed deals for US LNG deliveries.
Poland is also pushing ahead with plans to expand its LNG terminal in the Baltic port of Swinoujscie (pictured), and in December launched a bidding process to boost its capacity.

Pawel Jakubowski, CEO of Polskie LNG, said the LNG deliveries and Norwegian gas supplies could reorientate the central European gas market by creating north-south gas routes to replace the existing east-west links, weakening reliance on Russia.

“Poland is working on interconnectors with Lithuania, Ukraine, Slovakia and the Czech Republic to be able to deliver surplus volumes to neighbouring markets to create a regional gas hub,” Jakubowski said. “The Baltic pipe can give us very stable supplies to the Polish gas market on a long-term basis. The LNG terminal can give us flexibility and price arbitrage.”

Gazprom dominates Polish gas supplies. Picture credit: Wikimedia

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