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UPDATE 1-Poland and Denmark to launch key gas pipeline survey on June 6
June 2, 2017 / 12:32 PM / 3 months ago

UPDATE 1-Poland and Denmark to launch key gas pipeline survey on June 6

* So-called Open Season process to start on June 6

* Survey will help operators confirm demand for capacities

* Results key for final investment decision (Adds details, quotes)

WARSAW/COPENHAGEN, June 2 (Reuters) - Poland and Denmark will launch a key survey next week to determine demand for capacity in a planned gas pipeline linking the two countries, a project which could allow Poland to import up to 10 billion cubic metres (bcm) of gas from Norway.

Poland imports most of the 15-16 bcm of gas it consumes annually from Russia and hopes deliveries from Norway, as well as by sea through its liquefied natural gas (LNG) terminal on the Baltic coast, will reduce that reliance.

The so-called Open Season procedure to be launched by the Polish and Danish gas system operators on June 6, is a market survey that will help confirm the extent of gas demand and the required capacity for the Baltic Pipe.

"The preliminary study shows that the project could bring economic benefits for both Poland and Denmark, improved security of gas supply and further diversification of energy sources in the EU," said Danish climate and energy minister Lars Christian Lilleholt in a statement.

But he said there was still a lot of uncertainty around the economics of the project and the results of the market survey would be important for the final investment decision.

"The government will later have to make a decision on more binding phases of the project. It will be crucial to confirm that there will be significant economic gains for Denmark and that the project does not entail unnecessary risks," he said.

Poland's state-run gas firm PGNiG, which buys most of its gas from Russia's Gazprom, has said previously it would book almost all of the capacity offered.

PGNiG plans to replace Russian supplies with gas deliveries from Norway and LNG after 2022, when its long-term deal with Gazprom expires.

Danish gas system operator Energinet.dk said on Friday the goal was to start gas transmission services by Oct. 1, 2022 and more details would be given on June 6.

Poland's ruling conservative Law and Justice party (PiS) revived the plan for the pipeline, which dates back to 2001, in 2015 and said it was a top priority.

Since then it has struggled to convince Norway and Denmark to join in and negotiations have been tough, mostly on how to split the costs, which have not been disclosed. (Reporting by Agnieszka Barteczko and Stine Jacobsen; editing by David Clarke)

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