GAS LNG Norwegian Corridor 7 February, 2019 10:00 am   
COMMENTS: Piotr Naimski

Naimski: Baltic Pipe is going forward. A second LNG terminal might be needed (INTERVIEW)

Government Plenipotentiary for Strategic Strategic Infrastructure Piotr Naimski talks about the progress of the Baltic Pipe project and new realities on the gas market in Poland after 2022, which may lead the authorities to invest in the FSRU in the Gulf of Gdansk. Will Baltic Pipe be able to cross Nord Stream 2 without administrative problems?

Piotr Naimski: No one agrees to outsiders to cross the sub-sea infrastructure. All you need is a contract between its owners describing its terms. We had precedents in the past in the case of a power interconnection between Poland and Sweden and Nord Stream 1. There are not many gas pipelines at the bottom of the Baltic, but there are power and telecommunications cables that must be exceeded when implementing new investments. The situation will be similar for Baltic Pipe.

Is there a security buffer in case of delays?

Each of the activities specified in the investment schedule provides for a time reserve. For now, we operate according to the schedule. We anticipate 25 months for the very construction of the undersea part. Meanwhile, this part, with good organization and weather, can be arranged in three months. And we gave ourselves two years, among other things because the Baltic Sea is sometimes unpredictable.

What about other barriers?

The terminal bill helps us a lot, and so does good cooperation at many administrative levels. We can count on understanding at all levels. The administration’s time limits are shortened to the minimum necessary. Offices work within the limits set by the Code of Administrative Procedure, using generally statutory deadlines. In the case of Baltic Pipe, we have a full understanding of the importance of this strategic investment and everything is done as quickly as possible. The prosaic example may be a correspondence, the circulation of which can be shortened, for example, by using a courier instead of traditional mail.

How does the government administration cooperate?

The umbrella of this action is the inter-ministerial team for Baltic Pipe. We meet as needed to coordinate activities or provide information about the progress of work. These are dozens of people who – I hope – can feel the co-authors of this success. We invited them to the ceremony of exchange of investment decisions on the construction of the Baltic Pipe at the Chancellery of the Prime Minister. Everyone wants to take part in a project that is good and is indisputably needed by Poland. We can say at this stage that we manage to implement everything as planned.

What about political support?

At the last meeting of the Energy and Treasury Committee on January 24, I presented information on the state of progress of the Baltic Pipe project. This is a very good forum for sharing information, including the opposition. Such meetings will be repeated from time to time as needed.

Do politicians criticize Baltic Pipe?

There are no critical voices. There are questions, sometimes quite detailed. There is a common understanding of the need for construction expressed in votes in the Sejm, for example on the amendment of the Terminal Act, which gained cross-party support. This means that this project is considered important for the country and above the political dispute.

Are you afraid of environmentalists who may consider the gas pipeline to be “orphaned” by the development of renewable energy?

All regulations regarding the preparation of investments in the context of the environment are respected. Environmental permits have been partially obtained and we will apply for them further. Baltic Pipe also includes investments in Poland near Niechorze, which have already received the first permits. This also applies to the undersea part. And advocates of RES development know well that the condition of this process is, among others, access to safe gas sources and the construction of several gas power plants.

Is it worth considering Baltic Pipe 2 in the face of growing gas demand in Poland?

At the moment, we are not thinking about the second line of Baltic Pipe. This is not impossible in the future, but at the moment we do not think about it. We are expanding the LNG terminal in Świnoujście. Gaz-System prepares an update of the feasibility study for a floating LNG terminal in Gdańsk. It applied for including this project on the list of Projects of Common Interest of the European Union. However, the schedule provides for implementation after 2022. If the gas demand goes beyond what is provided by Baltic Pipe and the extended terminal in Świnoujście, it will be reasonable to build the FSRU in Gdansk. This is a likely scenario.

What will we do with the Yamal contract after 2022?

It is worth looking at what is happening in practice. PGNiG concludes further long-term contracts for LNG. They presented the aforementioned parliamentary committee plans to build a purchasing portfolio. They will be implemented from 2022-23 and are of various types. Some of them assume a collection point in Świnoujście, but some remain flexible thanks to the FOB clause, which will allow them to sell gas where there is such demand. Long-term contracts are gathering for a total of almost 10 billion cubic meters annually after 2022. LNG terminals in the USA, from which this gas is to come, are already being created. The long-term purchase contract with Gazprom will expire at the end of 2022.

Does the growing cooperation with the Americans attract the USA to Poland politically?

This is a great opportunity for Poland, which fits into the wider American strategy of introducing American LNG to the global market. The contracts signed by PGNiG are beneficial for Poland and constitute precedents indicating the attractiveness of American supplies to Europe. The supply of energy resources, including LNG, is part of the policy. There is no doubt about it.

Is the Middle East summit an element of this puzzle?

In relations with the USA, everything is connected with everything, but our bilateral strategic energy dialogue, which I initiated with the secretary of energy Rick Perry, is a parallel activity. We are about to talk about it during the first formal meeting in March in Houston.

Interview conducted by Wojciech Jakóbik