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INTERVIEW-Poland plans big cross-border gas pipeline programme
January 22, 2015 / 4:01 PM / 3 years ago

INTERVIEW-Poland plans big cross-border gas pipeline programme

* Poland to unload first LNG testing ships in mid-2015

* Builds new cross-border links to resell gas surplus

* Aims for gas link with Ukraine

By Anna Koper and Agnieszka Barteczko

WARSAW, Jan 22 (Reuters) - Poland plans to build more gas pipelines to link with its neighbours to offload excess from liquefied natural gas (LNG)imports and connect with other grids to the south.

“The projects we are working on have a wider, European context,” Jan Chadam, the head of Poland’s gas grid, said. “The investment in assets on our side is significant, but it is in the interest of all to offer services to a bigger number of market participants, not only in Poland.”

To reduce its dependence on Russia, Poland is building an LNG terminal at the Baltic port of Swinoujscie, which will be able to receive 5 billion cubic metres (bcm) of gas imports per year from far afield. The first trial shipments are expected to unload there in mid 2015, Chadam said.

Poland uses around 16 bcm of gas annually, buying most of it from Russia’s Gazprom under long-term contracts. But with these expiring only after 2020, it may find itself with a gas surplus it will have to resell with the addition of LNG imports in the meantime.

Its answer is to plan to spend around 7 billion zlotys ($1.89 billion) by the end of 2018 to build new pipelines on its territory, and cross-border links with Lithuania, the Czech Republic, Slovakia and Ukraine.

It also plans to integrate, by 2019, with gas markets in central Europe, by building a north-south pipeline linking the terminal in Swinoujscie, through Czech Republic with Croatia, Chadam said in an interview.

“We see a chance in being a country located in the heart of central Europe, with access to the sea. We perceive it as a chance to build an integrated European market, especially the Central European market, using the potentially sizable Ukrainian market”.

He added that Poland aims to become a part of the 500 bcm European market to strengthen its negotiating position with potential LNG suppliers.

“The negotiating power of such a market in talks with the suppliers is completely different, especially when this market is well-integrated in terms of infrastructure,” Chadam said.

Polish grid Gaz-System signed in December an agreement with the Ukrainian gas grid operator Ukrtransgas on building a cross-border gas link, which could help it access the 50 bcm gas market of its southeastern neighbour.

“Ukraine, if it solves its own problems, is also an attractive market. On our side decisions are made.”

He also added that Gaz-System is considering building new gas storage tanks, adding a capacity of up to 1.8 bcm to the current 2.7 million bcm at the cost of around 3 billion zlotys.

$1 = 3.6974 zlotys Editing by William Hardy

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