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    Baltic Pipe Receives EU Funding

Summary

The Danish-Poland interconnector will allow Poland to receive more gas from Norway.

by: William Powell

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Natural Gas & LNG News, Europe, Security of Supply, Energy Union, Corporate, Import/Export, Political, Liquified Natural Gas (LNG), Infrastructure, Pipelines, News By Country, Denmark, Norway, Poland, Russia

Baltic Pipe Receives EU Funding

The European Union is to pay almost €800mn ($909mn) in cross-border energy projects, from the Connecting Europe Facility. Of that, over a quarter is to go to the Baltic Pipe, the Danish-Polish link that will bring Norwegian gas to Poland, the European Commission said following the January 23 vote.

Due to start up October 2022, Baltic Pipe will enable Norwegian gas to flow through Denmark to Poland and their neighbours, and include reverse transmission capacity from Poland to Denmark and Sweden. The equal partners Gaz System of Poland and Energinet of Denmark took final investment decision in November, bringing the construction agreement, concluded 10 days earlier, into force.

BalticPipe is expected to cost Danish kroner 12bn ($1.85bn), compared with the EU grant of nearly €215mn, and have up to 10bn m3/yr capacity. 

The EC said that in making the award, it gave priority to projects that increase competitiveness, enhance the EU's security of energy supply through the promotion of safe, secure and efficient network operation, and contribute to sustainable development and environmental protection. Creating a connected, modern energy grid represents a crucial element of the Energy Union, one of the political priorities of the Juncker Commission.

Poland has been criticised by the European Federation of Energy Traders and consultants for energy policies that stifle competition in trade and supply. Poland has access to its equity Norwegian gas through the onshore German pipeline network and also to LNG, delivered to its terminal on the Baltic coast. It will receive its fiftieth cargo there January 27, a spot delivery from the US Sabine Pass terminal, but most of its LNG comes from Qatar. It is keen to cut its imports from Russia, its major supplier, and long term contracts with Gazprom for pipeline deliveries expire in the coming few years. 

The EC vice-president in charge of the energy union, Maros Sefcovic said the CEF "is one of those instruments that prove the EU's added value. Today's approved list showcases that Energy Union is an efficient tool to modernise and green our economies, to make them future proof in line with climate and environmental goals.”

Two other gas projects also received money: about €27mn went to reinforcing the Bulgarian grid; and €44mn went to upgrade the Latvian storage plant, Incukalns.