Poland strengthening its energy security via 10-year gas sales contract with Norway

Norwegian state-owned energy giant Equinor on Friday announced a long-term gas sales agreement with its Polish counterpart PGNiG, which will result in the strengthening of the energy security of the latter.

Equinor revealed that the agreement is for 10 years with a volume of around 2.4 billion cubic metres (bcm) of gas per year to be exported through the new Baltic Pipe. The project connects the Norwegian gas export system to Poland via Denmark and facilitates the flow of Norwegian pipeline gas to Poland.

Equinor’s executive vice president Marketing, Midstream and Processing, Irene Rummelhoff, commented: “I am very happy that through this gas sales agreement we can extend our offering as a reliable energy partner also to Poland. Equinor is also working with local companies on developing large-scale offshore wind and solar projects in Poland, and we look forward to further developing our energy cooperation with PGNiG and Poland in the time to come.”

Equinor noted that the volumes under the new, long-term agreement reflecting market prices are equivalent to around 15 per cent of the typical, annual gas consumption in Poland. The agreement is from 1 January 2023 to 1 January 2033.

Iwona Waksmundzka-Olejniczak, CEO of PGNiG, said: “Equinor is a strategic business partner for the PGNiG Group playing a crucial role in our efforts to diversify gas supplies to Poland. The contracts we have just signed provide for gas that will be delivered to Poland using the Baltic Pipe pipeline, resulting in a significant strengthening of energy security of our country.”

Keeping the country’s energy security in mind during the current energy crisis, the Polish company also this year revealed its plans to produce an additional volume of approximately 0.5 billion cubic meters of natural gas from its Norwegian assets this year to ensure the diversification of gas supplies for Poland.

As part of the same strategy, PGNiG also secured more acreage in Norway by agreeing to acquire a stake in an Aker BP-operated offshore field.

The Baltic Pipe project connects to the Norwegian gas transportation system with Denmark’s transmission system operator (TSO) Energinet responsible for the components on Danish territory and Poland’s TSO GAZ-SYSTEM in charge of the section between Denmark and Poland.

Just last week it was announced that the project had received the operating permit, completing the process of obtaining all necessary decisions. The offshore gas pipeline is scheduled for partial commissioning this October and full commissioning on 1 January 2023, at a full annual capacity of up to 10 BCM.