The Baltic Pipe Project
The Baltic Pipe Project is a major gas infrastructure project that aims at creating a new supply corridor for gas in the European gas market; for the first time it will enable shippers to flow gas directly from Norway to the markets in Denmark and Poland together with their neighbouring markets. Moreover, it will also enable shippers to flow gas bidirectional from Poland to the Danish-Swedish market.
The main goal of the Baltic Pipe Project is the construction of the new gas transmission system connecting the natural gas transmission systems of Denmark and Poland to create a possibility for transmission of natural gas from the Norwegian Continental Shelf.
The Baltic Pipe project is essential for completion of the European internal energy market and aims at reaching the EU's energy policy objectives ie.: competitiveness, integration of the gas markets, enhancement of the security of supplies and efficient implementation of sustainability. The Baltic Pipe project is part of the concept of the North-South Gas Corridor and the Baltic Energy Market Interconnection Plan (BEMIP), which are the priorities for the development of energy infrastructure set by the European Union
The Baltic Pipe Project consists of four key components:
► A Danish upstream tie-in from the Norwegian system in the North Sea to the Danish landing point (or the existing Danish upstream infrastructure) (the “Norwegian tie-in”)
► Expansion of the existing west-east capacity in the Danish onshore transmission system (the “Danish Expansions”)
► a compressor station placed at Zealand in Denmark (the “Compressor Station”)
► An offshore transmission interconnector from Denmark to Poland with compressor station (the “Baltic Pipe”)
► Expansion of Polish transmission system (the “Polish Expansions”)
GAS TRANSMISSION OPERATOR GAZ-SYSTEM S.A.
Gas transmission Operator in Poland
Gas transmission Operator in Denmark
Description of the investment
The project is currently in the pre-investment phase. At the moment, GAZ-SYSTEM and Energinet.dk are investigating the possibility of establishing a gas corridor from Norway through Denmark to Poland called "The Baltic Pipe Project" to define the most optimal scenario and to determine the ultimate efficient definition of the project from the commercial and technical point of view. From March 2016, the works on the Feasibility Study are ongoing, the study is performed by Rambøll Danmark A/S, GAZOPROJEKT S.A and Ernst & Young. It is expected that the Feasibility Study will be concluded by the end of 2016.
The said feasibility study is examining capacities of up to 10 BCM/year with the aim of having a finalized project by 2022.
The Norwegian system operator Gassco A.S. is contributing to the analysis of the relevant elements (NO-DK connection).
The main objectives of the Baltic Pipe Project are to further strengthen supply diversification, market integration, price convergence and security of supply in primarily Poland and Denmark and secondarily in Central and Eastern Europe (CEE) and the Baltic region:
• integrating the Danish-Swedish and Polish gas markets by means of supply competition and bidirectional trading, secondly with a view to include planned interconnections to the CEE (via PL-CZ interconnection, PL-SK interconnection, PL-UA interconnection) and the Baltic States (via PL-LT- interconnection)
• strengthening regional security of supply through supply diversification (enabling new sources of gas supply)
• increasing the competitiveness on the regional gas markets and facilitating price convergence between the markets, possibility of new players entrance and potential increase in gas demand in the impacted regions
• improvement in technical reliability of gas supply for customers by diversifying the imported gas supply directions
• connecting the Baltic Pipe to the LNG terminal in Świnoujście, which could in the future guarantee Scandinavian countries access to the global liquefied natural gas (LNG) market.
Project of Common Interest
The Baltic Pipe Project is indicated on the European Commission list of the PCI projects (Projects of Common Interest), adopted on Nov 18 2015. Previously, in 2013, the Baltic Pipe Project also was included on the first European Commission list of the PCI projects.
EU financial support for the Project
Connecting Europe Facility
In 2015, the Baltic Pipe was granted 0.4 mln EUR as additional funding for the preparatory works. These resources will be spent on the development of the required preparatory documentation by GAZ-SYSTEM SA and Energinet.dk, ie. preparation of the Feasibility Study
Trans European Networks – Energy (TEN – E) Programme
Previously, pursuant to the Decision of the European Commission the preparatory (pre-investment) works for the Baltic Pipe were granted funding within the Trans European Networks – Energy (TEN – E) Programme.
The first co-financing awarded to this project was obtained by GAZ – SYSTEM S.A. in June 2009 from the 2008 TEN-E Programme for actions involved in the pre-investment studies and administrative proceedings. The co-financing awarded in total 3.19 mln EUR with a maximum funding ceiling of 50%.
In May 2010, the European Commission awarded GAZ – SYSTEM S.A. the second co-financing from the TEN–E Programme for the application submitted in 2009. The scope of funding awarded concerned the conduct of seabed geotechnical survey, an environmental surveillance program, preparation of a gas quality study and a functional analysis of the gas off-take terminal in Poland.
In total, the value of the financial assistance awarded to GAZ-SYSTEM S.A. in the scope of trans-European transport and energy networks for the Baltic Pipe project amounts to 4.31 mln EUR.