European Commission releases €215 million for Baltic Pipe construction

The European Commission has committed to providing €215 million to finance part of the construction costs of the Baltic Pipe project designed to carry Norwegian gas to Danish and Polish markets.

The grant agreement releasing 215 million euros of EU funding for the construction works for the Baltic Pipe project which will bring gas sourced from Norwegian offshore fields via the Baltic Sea to Poland was signed on Monday in Brussels.

The agreement was signed in the presence of Maros Šefcovic, Vice-President of the European Commission, Miguel Arias Cañete, Commissioner for Climate Action and Energy, Mateusz Morawiecki, Prime Minister of Poland and Piotr Naimski, Plenipotentiary of the Government of the Republic of Poland for Strategic Energy Infrastructure.

According to the EC, the Baltic Pipe project is a gas infrastructure project aiming at creating a new gas supply corridor in the European market.

Poland, which according to reports has a gas supply deal with Russia’s Gazprom until 2022, hopes the Baltic Pipe Project would reduce Poland’s “and eventually Eastern and Central Europe’s” dependency on Russian gas imports.

The new pipeline will allow, as of 2022, the shipment of gas from the North Sea to the Polish market and further to the Baltic States, as well as to end-users in neighboring countries.

At the same time, EC says the pipeline will enable the supply of gas from Poland, including from Liquefied Natural Gas imports, to the Danish and Swedish markets.

Poland’s Gaz-System, which is a cooperator with the Danish Energinet, said on Monday that the EU subsidy would be allocated for the implementation of construction works both for the offshore pipeline connecting the transmission systems of Poland and Denmark, as well as for the expansion and improvement of the Polish natural gas transmission system.

Polish and Danish gas transmission system operators GAZ-SYSTEM and Energinet have both made positive investment decisions late in 2018, and agreed to implement the joint Baltic Pipe project.

The two operators Energinet and GAZ-SYSTEM have committed to construct overall 900 km long offshore and onshore gas pipeline. Baltic Pipe will be crossing three national territories – Denmark, Sweden and Poland, and gas transmission are expected to start in October 2022.

Before the investment decision was made, Energinet signed an agreement with GASSCO (its Norwegian counterpart) regarding the construction of the tie-in to the Norwegian gas pipeline Europipe II and a pipeline to the Danish west coast which will enable gas flow from Norway to Denmark and Poland.

Tomasz Stępień, President of GAZ-SYSTEM said: “From the point of view of our country the gas connection between Poland and Denmark has the strategic dimension and it is needed to diversify the supplies. The investment is also beneficial for the EU, which seeks to increase trade and competitiveness of the European gas market.”

Third route for Nord Stream 2

Meanwhile, another pipeline project in the Baltic Sea, Gazprom’s Nord Stream 2, has been facing difficulty in Denmark. Namely, the operator of the pipeline designed to carry Russian gas via the Baltic Sea to Europe, has now submitted a third application for a route through Danish waters while accusing Denmark of making deliberate attempts to delay the project by asking for the third route option.

This third application for the pipeline route through Danish waters was submitted on Monday, April 15 more than two years after submitting the first application.

The pipeline operator said on Monday that the third application, together with the Environmental Impact Assessment (EIA), covers a route in the Danish exclusive economic zone (EEZ) in the waters south of Bornholm. This application and the EIA has been submitted in accordance with the decision made by the Danish Energy Agency (DEA) on March 26, 2019. Read more here.

Offshore Energy Today Staff

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