The Baltic Pipe will not be empty. It is expected that the new PGNiG-Equinor contracts will fill over half of the pipe in 2023. On September 27 the gas pipeline will be officially opened, and that ceremony should not be eclipsed by old political disputes – writes Wojciech Jakóbik, editor-in-chief at BiznesAlert.pl.
Baltic Pipe contracting forges ahead
Despite some media report claiming the Baltic Pipe would be empty, the pipe will be actually over half full. PGNiG has stated that the booking at the entry point in Nybro will make it possible to tap into its own gas deposits as well as add new gas contracts. It is worth to once again summarize them and provide an update on the latest deals with Norwegians. PGNiG produces its own gas, thanks to which 3 bcm of the Baltic Pipe’s capacity will be used annually, which means a fourth out of that will be used in the final quarter this year. Add to that contracts with Lotos (1 bcm per year), Aker BP (not specified, but probably a billion), whose output was till now transmitted to Germany, Orsted (about a billion from mid 2023 until 2028) and Equinor (2.4 bcm a year from 2023 to 2033). The plural noun used to describe contracts with Norwegians suggests that these may be two contracts implemented in different ways, confirming unofficial information obtained by BiznesAlert.pl about the fact that PGNiG allegedly acquired a total of three additional contracts. So far the numbers in the Total contract have not been revealed. BiznesAlert.pl has previously wrote about the agreement, and PGNiG confirmed it. Perhaps this has not been divulged due to the fact that the volume is low. The Ministry of State Assets revealed on Twitter that taken together – the own production and contracts in Norway – 80 percent of the capacity reserved by PGNiG will be filled, which is about 6 of 8 billion cubic meters out of the 10 billion cubic meters that the pipe’s full capacity will be able to transmit as of the New Year. However, the Minister of State Assets Jacek Sasin said on TVP that the contracts will cover 8 billion cubic meters a year. This discrepancy remains to be explained. In addition, Mateusz Berger, the new Government Plenipotentiary for Strategic Energy Infrastcuture has recently revealed that the Baltic Pipe’s fill capacity may be available not on New Year’s, but already in December 2022 thanks to the fact that works on the Danish section sped up as the obstacles posed by issues with permits for the offshore part of the pipe in this country have disappeared.
The agreement with the Norwegians was signed at the epicentre of the energy crisis, and therefore its high cost, which nevertheless had to be borne for security reasons, must be taken into account. This contract should have been signed in 2021 or earlier under the Baltic Pipe maximum use plan, but that did not happen. Fortunately, PGNiG, led by Iwona Waksmundzka-Olejniczak caught up with the backlog, which has improved the security of gas deliveries in the 2022/23 heating season and has undermined the claim that there would be no new deliveries from Norway. Poles lined up in this queue long before the energy crisis, and won theirs despite unconfirmed speculation that the Germans would be first. It remains to be decided whether the entire contracted amount of gas will reach Poland via the Baltic pipeline, or whether the reverse of the Yamal gas pipeline on the Polish-German border will be fully available, due to the fact that the Russians stopped deliveries along this route violating the contracts with Europeans under the guise of a dispute over payments in rubles.
Poland’s and Piotr Naimski’s celebration
On September 27, 2022, the opening ceremony of the Baltic pipeline will be held at the Philharmonic Hall in Szczecin with the participation of the CEOs of the Polish Gaz-System and the Danish Energinet responsible for this investment. None of this would have happened if it wasn’t for Piotr Naimski, the former Government Plenipotentiary for Strategic Energy Infrastrcuture who fought across party lines and led the investment to its conclusion. „The Baltic Pipe, which connects Poland and Norway and will remove the Russian gas noose off Poland, will be opened during a special ceremony. 30 years of struggle and the last almost 7 years of hard work have brought results,” Piotr Naimski wrote on Facebook. A few days ago he was awarded the Order of the White Eagle by the President of Poland for his role in the opposition movement during the communist era, but he is receiving congratulations from various people for successfully completing the Baltic Pipe project. „The construction of the Baltic Pipe today is a source of my satisfaction. It contributes significantly to protecting our independence. Today, no one needs to be convinced that it is impossible to ensure Poland’s security without ensuring the supply of energy raw materials, the necessary technologies and domestic energy production,” the former minister said.
He was congratulated by the Minister of Climate and Environment Anna Moskwa. „Poland is grateful for energy security, for diversification of energy sources, for steadfastness and consistency. Thank you for the Baltic Pipe,” she wrote. Former Polish PM Jerzy Buzek also congratulated Naimski. During his term in office the Baltic Pipe project was prepared, but ultimately failed, as he lost power to people who until January 2022, right before Russia invaded Ukraine, argued that the pipe had no basis and a new contract with Gazprom should be signed. „This project would not have come into fruition without Piotr Naimski. Piotr, thank you for your steadfastness and congratulations on receiving the Order of the White Eagle today!,” professor Buzek wrote. The pipeline from Norway had many fathers, and the persistence of one of them led this venture to a successful conclusion after a third try. Regardless of political disputes, Poland has another source of physical gas supplies from outside Russia after the LNG terminal, which will make it easier for it to get through the energy crisis fueled by Gazprom. However, there may be many more surprises along the way. Incidentally, the Norwegian media have warned of the growing intelligence activity of the Russians on the Norwegian shelf.