24.05.2018

GAZ-SYSTEM and Amber Grid Made Positive Investment Decision Regarding Construction of Gas Interconnector Between Poland and Lithuania

The gas transmission system operators from Poland and Lithuania have signed a Connection Agreement that governs legal, business, and technical aspects of the investment project. The conclusion of the Connection Agreement is a real joint commitment of the Parties to build the interconnector. The ceremony took place on 24 May 2018 in Copenhagen, during the on-going European Energy Infrastructure Forum.

– “The construction of the Poland-Lithuania interconnector, one of the most important European projects in the gas field, is an opportunity to remove the existing isolation between the Baltic states and the European gas market. This interconnector will enable the integration of these states with the competitive gas market of the EU, which we wish to build together. Today’s ceremony shows how seriously we treat the idea of the regional energy solidarity and building a common energy market in the European Union” – said Tomasz Stępień, President of the Management Board of GAZ-SYSTEM.

– “It is worth emphasising that this Agreement, in connection with the Grant Agreement executed for the Baltic Pipe project, is a milestone toward extending the European gas market to cover the Baltic Sea region. It is also a part of the implementation of the BEMIP action plan for the interconnector in the energy market of the Baltic states – added Mr Stępień.

The ceremony was attended by, among others: Piotr Naimski – the Secretary of State of the Chancellery of the Prime Minister, Government Plenipotentiary for Strategic Energy Infrastructure, Miguel Arias Cañete EU – Commissioner for Climate Action and Energy, Michał Kurtyka – Energy Deputy Minister, Government Plenipotentiary for the COP24 Presidency, and Egidijus Purlys – Deputy Minister of Energy of Lithuania.

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The GIPL project aims to integrate gas markets of the Baltic States with the uniform gas market of the European Union, diversify gas supply sources, and increase the security of gas supplies for the states of this region. The project has been recognised by the European Commission as one of the key infrastructure projects ensuring the implementation of the energy solidarity mechanisms and security of supplies critical to the EU energy security.
 
The construction of the interconnector between Poland and Lithuania was once again included in the European list of gas sector projects of common interest (PCIs), published on 24 November 2017 by the European Commission.  The preparatory project work has been granted the highest possible amount of EU financial aid (under the CEF) admissible for studies, i.e. 50 percent. Out of the total amount of over EUR 10 million, EUR 2.5 million went to Amber Grid, while EUR 7.6 million was allocated to GAZ-SYSTEM.

The project’s construction work, however, were granted up to EUR 266.4 million of EU aid funds under the Connecting Europe Facility (CEF). Out of the total amount of funding, Amber Grid was allocated nearly EUR 58 million, while GAZ-SYSTEM was allocated over EUR 208 million.

In accordance with the ACER’s decision of 11 August 2014 on the cross-border project cost allocation, in addition to the EU financial support, the GIPL construction project, including a part of the GIPL infrastructure costs in the territory of Poland, will be co-financed by Lithuania, Latvia, and Estonia (TSOs – transmission network operators). A separate agreement regulating the practical implementation of the above decision between the TSOs of these countries and GAZ-SYSTEM was signed on 11 May 2018.

The scope of the investment includes the construction of 357 km of the DN 700 MOP 8.4 MPa gas pipeline on the Polish side and 165 km of DN 700 MOP 5.4 MPa gas pipeline on the Lithuanian side together with the accompanying infrastructure.  The Contracting Parties have undertaken to commission both GIPL parts by 31 December 2021. The investment is currently at the design stage.

Gas Transmission Operator GAZ-SYSTEM S.A. is a strategic company for the Polish economy, responsible for the transmission of natural gas and the management of the most important gas pipelines in Poland. GAZ-SYSTEM S.A. is also the owner of Polskie LNG S.A., a company established to build the Świnoujście LNG terminal.
As part of its 2015-2025 investment scheme, GAZ-SYSTEM S.A. is planning to build over 2,000 km of new gas lines in western, southern and eastern Poland. Further expansion of the domestic transmission system, including construction of new gas pipelines being part of the North-South Gas Corridor, as well as construction of interconnections with Lithuania, Slovakia and the Czech Republic, will enhance Poland’s energy security and contribute considerably to the development of the European transmission system.
In 2009-2015, GAZ-SYSTEM S.A. completed an investment plan consisting in the construction of over 1,200 km of new gas transmission lines in north-western and central Poland. The projects implemented by the company and the physical and virtual reversal on the Yamal pipeline have translated into a significant increase in technical import opportunities on routes other than from the East.

 


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