Polish Briefing 9 May, 2019 9:00 am   
COMMENTS: Mateusz Gibała

Polish Briefing: Construction of GIPL to start in autumn. Gas prices fall thanks to LNG

What goes on in Poland on the 9th of May.

The construction of the Polish-Lithuanian gas pipeline is to start in autumn

The President of the Lithuanian gas network operator AB Amber Grid Saulius Bilys informed during the XXII edition of the Gazterm conference held in Międzyzdroje that the construction of the Polish-Lithuanian gas pipeline (GIPL) is scheduled to start in autumn.

– The contractor will soon be selected, and in the autumn we want to start the construction of GIPL so that it can be launched in the autumn of 2021 – he said.

The total length of the gas pipeline is about 515 km – on the Polish side about 338 km, on the Lithuanian side about 177 km. The estimated cost of the project is 558 million euros. In the middle of April, the 158 km southern section of the gas pipeline in the Masovian and Podlasie voivodships received a set of environmental decisions. Gaz-System informed that in the second half of 2019, it is planned to initiate a tender procedure for a contractor for construction and assembly works. The contract should be signed in the first half of 2020.

Orlen: Gas prices in Europe are falling thanks to LNG supplies

According to PKN Orlen, the price of gas is currently falling mainly due to the increase in LNG supplies to Europe. It is possible thanks to price decline in Asia.

– I wanted to tell you about the last two winters – said Iweta Opolska from PKN Orlen, presenting the fundamental factors in shaping the price of gas. The first difference between winter 2017 and 2018 is the increase in LNG supplies.

– LNG not only compensates for the decline in its own production and supplies from Algeria or Norway, but also gives additional deliveries in the autumn – indicated Opolska. She added that last year in October the prices of CO2 and oil fell, which also affected the decline in gas prices.

– LNG is reaching Europe more and more and is starting to push gas supply from warehouses. The supplies of liquefied gas were much higher in last three months of 2018, what stemmed from the decreasing difference between the price in Asia and Europe. If the price in Asia is lower than the European one, it is more profitable for Americans to send gas to Europe, also to other traders – explained PKN Orlen analyst.

Other factors – inventory level, temperature and others – are of less importance according to Opolska.