Gas import capabilities are increasing

The end of the next year will be a turning point for the Polish gas market. On one hand a big long0term contract with Gazprom will expire and on the other hand we will gain new connections and supplies from Norwegian fields and LNG.

Publikacja: 09.09.2021 19:38

Gas import capabilities are increasing

Foto: Fotorzepa, Mariusz Szachowski

The Yamal contract under which Poland imports from Russia up to 10.2 billion cubic metres of gas a year, expires in December next year. Baltic Pipe gas pipeline is expected to be completed, which would connect our country with Norwegian gas fields and the increase of regassification capabilities of LNG terminal in Świnoujście should be finished by that time. Both these projects will enable Poland to replace import from Russia with the supplies from alternative directions. Piotr Naimski, secretary of state, representative of the government for strategic energy infrastructure assures that both these projects will be completed on time

– Polish economy and Polish recipients can rest assured in respect to gas supplies. We will have this gas in liquefied form, we will have this gas from deposits, we will have it from various sources – said Naimski during the debate entitled “Breakthrough gas year: completion of construction of Baltic Pipe and acquisition son the Norwegian shelf”, which took place in „Rzeczpospolita” Room during the Economic Forum in Karpacz.

Norwegian deposits

Tomasz Stępień, president of Gaz-System also stressed the timely completion of both these key investments for Poland. Ho noticed that in case of Baltic Pipe the works on laying and connecting the pipes of the Baltic Sea floor will be completed on Polish die in a few days already. These works on the Danish side should be completed in a few weeks time. The offshore part of Baltic Pipe is 275 km long, of which more than 250 km of pipes are already laid today. The gas pipeline goes through Polish, Swedish and Danish waters and it intersects with various linear infrastructure. There are 22 junctions, including four of them with Nord Stream gas pipelines.

– We still have pressure tests to do, cleaning and filling the gas pipeline with gas. Some works are still to be dome onshore, both in Denmark and in Poland as this gas pipeline does not end behind the line of dunes – said Stępień. He added that Baltic Pipe has to be connected to the national transmission system and the system itself needs to be strengthened and for this reason two additional gas pipelines and three pumping stations are being constructed. Together they will provide 10 billion cubic metres capacity.

– According to the schedule the entire project should be completed in September 2022, including securing the operational permits so that the first commercial transmission of gas could start in October 2022 - declares Stępień. Torben Brabo, director for international relations at Energinet, a company responsible for the construction of the Baltic Pipe on the Danish side assured that this part of the gas pipeline will be completed on time as well. In this situation, nothing should prevent the gas, which is already being produced by PGNiG in Norway, from directly reaching Polish recipients. Moreover, the volumes of obtained gas should increase significantly soon. All thanks to the ongoing acquisition of Ineos E&P Norge, which owns 22 concessions in Norway, including three fields in the exploitation phase.

After the finalization of the acquisition, PGNiG will have 58 licenses in that region. As a result, it will increase production to approx. 2.5 billion cubic meters. from 0.9 billion cubic meters planned to be acquired this year. In the peak period, i.e. in 2027, it will be approx. 4 billion cubic meters. - This means that our own resources will enable us to use about half of the Baltic Pipe capacity reserved by us. The production estimates may be even higher, because by acquiring Ineos E&P Norge, we also become the owners of the concessions on which the exploration of new deposits is carried out - says Artur Cieślik, vice-president for strategy and regulation at PGNiG. He adds that in addition to the gas produced by the company, the Baltic Pipe will also receive gas purchased in Norway from other companies.

Biomethane and hydrogen

Poland needs additional quantities of the raw material not only as a consequence of the expiry of the Yamal contract, but also to meet the growing demand of the domestic economy. - Without stable, diversified gas supplies, it will not be possible to build sufficiently stable power capacities in the energy system. It will be a sort of a stabilizer of the power system and heating system to enable further development, either in renewable energy or in areas such as local balancing and energy storage - says Paweł Pikus, director of the Electricity and Gas Department at the Ministry of Climate and Environment. He adds that the developing economy needs further investments, also after the completion of such important projects as the Baltic Pipe. These will probably still be supported by the EU, but more towards the so-called greener gas, i.e. towards the development of technologies and infrastructure for the production and distribution of biomethane or hydrogen.

- Decarbonization of the gas sector, i.e. removing CO2 emissions from it, is a way to survive in the thirties and forties. In the twenties, it may still be possible to build gas production and transmission infrastructure, but it will become increasingly difficult due to the acceleration of climate policy - says Wojciech Jakóbik, editor-in-chief of BiznesAlert.pl. For this reason, he already calls to think about projects that would allow to utilize the current and planned infrastructure for the development of the market for new ecological raw materials.

Until the new energy resources that meet the conditions of the EU climate policy become common on the market, investments aimed at increasing LNG supplies are necessary as well. In Polish conditions, this means the expansion of the gas terminal in Świnoujście and the construction of the FSRU floating terminal in the Gdańsk region. These investments will allow Poland not only to increase its maximum gas import capacity, but above all enable our country to obtain it from various producers worldwide. Gaz-System informs that the annual regasification capacity of the terminal in Świnoujście will be expanded to approx. 8.3 billion cubic meters by the end of 2023. In turn, the FSRU, which will be built a few years later, may reach a capacity of at least 4.5 billion cubic meters. - We are currently at the stage of consulting the documentation with the market on this matter, and next year we will sign contracts and decide what parameters should be met by this ship - whether it should be capable of accepting and unloading 30, 40, 50, or maybe more ships with LNG per year - says Stępień.

Important diversification

Since the launch of the terminal in Świnoujście, PGNiG has so far imported almost 140 ships with LNG, which delivered a total of over 15 billion cubic meters of fuel after regasification. These amounts are increasing year by year and the company would like to continue this upward trend. This is facilitated, among others, by a recently signed contract with companies from the Venture Global group for additional LNG supplies from the USA. - Under this agreement, we will be able to deliver nearly 7.5 billion cubic meters gas after regasification per year. The extension of the terminal in Świnoujście and in the further future of the FSRU in the Bay of Gdańsk will allow more gas carriers to be able to come to Poland - argues Cieślik. After 2024, the company’s LNG import portfolio will include approx. 12 billion cubic meters of gas after regasification.

The participants of the debate are not afraid that the current and new infrastructure may be used by the Russians to carry out mass gas supplies to Poland, as a result of which the already ongoing and planned investments and signed contracts would no longer be profitable. There is also no concern that in this way they will thwart Poland's diversification plans. Mr. Naimski notes that Russian suppliers operate on the European market without respecting market rules. As a rule, they use gas as a political tool, not just to make money. - As long as there is no guarantee that Russian politicians will not use energy supplies as a tool for its foreign policy, we will treat every cubic meter of gas imported from Russia with great suspicion. We have both regulatory and commercial capabilities in this respect - argues Naimski. According to Mr. Pikus, such an instrument concerns in particular the regulation on the diversification of gas supplies, which states that a raw material imported from the east may form only a small part of the portfolio of a given company.

The Yamal contract under which Poland imports from Russia up to 10.2 billion cubic metres of gas a year, expires in December next year. Baltic Pipe gas pipeline is expected to be completed, which would connect our country with Norwegian gas fields and the increase of regassification capabilities of LNG terminal in Świnoujście should be finished by that time. Both these projects will enable Poland to replace import from Russia with the supplies from alternative directions. Piotr Naimski, secretary of state, representative of the government for strategic energy infrastructure assures that both these projects will be completed on time

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