Poland: The energy challenge between the EU and Russia starts with natural gas

Poland: The energy challenge between the EU and Russia starts with natural gas

Arianna Pescini
A new shipping line and kilometers of pipelines: Poland is the key to Central and Eastern European independence from Russian supplies. Here is, energy analyst and researcher at the Jagiellonski Institute in Krakow, Wojciech Jakobík's input on the scenario

A port terminal capable of receiving at least 5 bcm of liquefied natural gas (LNG) from the Middle East. The gigantic seaport will allow Poland and the EU to begin to bypass their energy dependence on Russia and therefore also the prices set by Gazprom. Experts of the companies that have followed the project, PGNIG and Gaz-System, talk about complete self-sufficiency by 2022: "Europe can be fully independent if it has full freedom to choose its gas suppliers," explains Wojciech Jakobík, energy analyst and researcher at the Jagiellonski Institute in Krakow, "as well as the possibility of examining further LNG supply sources. However, this does not mean a complete stop to the purchasing of gas from Russia". A big step forward for a continuously growing business with a steady increase in demand.

The Polish project: The first supplies from Qatar

The hub is located in the town of Świnoujście, overlooking the Baltic Sea, on the border with Germany, and began operating by accepting and reconverting LNG reserves from Qatar. The country is one of the main suppliers of the precious energy resource, but other Middle Eastern countries capable of producing and exporting huge quantities will also soon become major suppliers. The "Kaczynski" terminal, costing over €900 million (with a €200 million contribution from the European Bank for Reconstruction and Development), was inaugurated at the end of 2015 and is part of a network that, over the coming years, by means of new routes, will try to supply gas at market prices to countries such as Austria, Slovakia, Bulgaria and Hungary: "This hub, supported by the EU, is part of the North-South Gas Corridor project and is the first of its kind and scale in Europe" continued Jakobík, "customers can either use the gas, or store it and in the meantime use other supplies. Poland’s neighboring states are negotiating to receive LNG from Świnoujście."

New gas pipelines to the North Sea and Adriatic

National energy company PGNIG also plans to create 2 routes that will connect the Baltic with the North Sea (reaching Norway, via Denmark) and the Adriatic (reaching the Croatian island of Krk). Within 10 years another 2,000 kilometers of pipelines will be constructed, and the carrying capacity of the port of Świnoujście could rise to 7.5 bcm of LNG: 50% of Poland’s entire needs. Poland is among the states that have most invested in the energy market, thanks to its geographical importance and the fact that it alone sorts 1/3 of the natural gas in the whole of Europe. But also, as stated by the government a few years ago, when hub construction began, to defend its own national security by freeing itself from Russia and from the situation of conflict between Moscow and Ukraine. The country currently imports 60% of its LNG needs from the former USSR. The rest comes from Central Asia and domestic sources.

New gas corridors could be created in the future

The Polish gas corridors, initially hampered by Germany (officially due to environmental issues), could benefit the entire European energy system and create the prerequisites for a greater independence from Russian supplies, with, however, economic and political repercussions: "Tensions between Russia and the US." continued Jakobík, "have always influenced the European energy market. But with the crisis in Ukraine and Moscow’s intervention, the relationship of trust between Russian and European hydrocarbon suppliers has deteriorated irreversibly, although some customers look past this and make great deals with Gazprom and Rosneft. Other tensions are linked to projects between Brussels and Washington for new gas corridors, such as that between the cities of Baku, Tbilisi and Ceyhan, and the Southern Corridor." The prospects, however, are good: "The old days are gone," stressed the analyst, "the natural gas market has changed. It has become a customer market. We want greater flexibility from suppliers. It is necessary that Gazprom also changes its behavior, as established by a study by the European Commission on antitrust and monopoly." Europe can finally realize the possibility of new markets with Iran, now that the economic and financial sanctions imposed by the EU have been lifted: "The Middle Eastern country," concluded Jakobík, "is planning to resume LNG import projects, which were previously implemented by companies such as "Iran LNG". It is a medium-term idea that Europe, if it were to move forward, would probably not let slip away."