Rival of Nord Stream 2 Baltic pipe project does not lag behind

The Gazprom-owned operator of the controversial Nord Stream 2 pipeline across the Baltic Sea to Germany has mobilized a second pipelaying vessel Akademik Chersky to continue laying pipes for Nord Stream 2 as the Russian gas project remains at gunpoint of the US and Europe.

The project is considered highly controversial as it increases Europe’s dependence on Russian gas, while providing a strategic source of revenue for Russia and the Kremlin.
At the same time pipelaying works will soon be launched in the Baltic sea for another project – the Baltic pipe.

All the tubes have already been manufactured and are to be laid in summer. The preparatory works have already been started on construction site. It is important to note that despite the ongoing Covid-19 pandemic, the construction of the Baltic Pipe is on track, as reported polish Wprost (Ruszyła budowa gazociągu Baltic Pipe).

“The construction of the Baltic Pipe is on schedule. All the necessary contracts have been signed with contractors and suppliers, all items have been delivered. The pipes for the Baltic Pipe offshore section have already been fully manufactured, most of them are ready, and more than half of them have been delivered to the site,” – said the representative of the Polish government on strategic energy infrastructure, Piotr Naimski.

When completed in October 2022, the Baltic Pipe will transport natural gas from the North Sea to Poland via Denmark. The pipe will be 900km long, its capacity will reach 10 billion cubic meters of gas per annum. The construction is estimated at €1.6 billion – the funds are allocated by a consortium of commercial banks and via two EU’s initiatives: the Connecting Europe Facility (CEF) and the Trans-European Networks for Energy Program (TEN-E). The Baltic Pipeline will consist of five key segments: North Sea Offshore, Onshore Denmark, Compressor Station Denmark, Baltic Sea Offshore and Onshore Poland (https://www.baltic-pipe.eu/wp-content/uploads/2020/08/BalticPipe-Project-Implementation-Stage.pdf).

The Baltic Pipe is a strategic EU infrastructure project. Its implementation is consistent with the energy policy objectives of the European Union: strengthening competition, integrating gas markets, enhancing security of supply, and effective implementation of sustainable development principles. The EU has included Baltic Pipe on its list of key infrastructure projects that are of common interest to Europe – also known as “PCI projects”. This is due to the essential role Baltic Pipe could play in contributing to the development of Europe’s internal gas market, and the strengthening the EU’s security of supply.

The project, involving bi-directional pipeline segments, will not only facilitate natural gas supply from Norway to Poland and other countries of the Baltic region, but also enable reverse transmission from Poland to Denmark and Sweden.

Also, the Baltic Pipe is strategically important for Poland which strives to diversify its natural gas suppliers. In one of his interview Andrzej Duda claimed: “We have no doubt that it is not only Polish-Norwegian-Danish project. It is important project for the energy industry of Europe, for the energy independence of the European Union. The project relates to the future of the Eastern Europe and our part of the world.”

Poland, being one of the oldest purchasers of Russian gas, is oriented towards the launch of the project to be scheduled on 2022, thought, on purpose. Because on the 31st of December, 2022, a long-lasting deal – the Yamal Contract, signed between Poland and Russia in 1996 – on the import of Russian gas terminates. As the Contract says, the Yamal gas pipeline, running through Belarus, annually supplies Poland with up to 10 billion cubic meters of natural gas. The Baltic Pipe project has a completion date of the 1st of October, 2022, established in order to reach production capacity and terminate the gas trade with Russia before the 1st of January, 2023. Consequently, when the project is fulfilled in 2022, the Russian gas monopoly is brought to an end.

The Baltic Pipe vs Nord Stream 2

TheBaltic Pipe project is being developed by the Danish gas and electricity transmission system operator Energinet and the Polish gas transmission system operator Gaz-System, both participate in the project in equal shares. Since neither Denmark nor Poland are authorized to make sole decision regarding the infrastructural project, the transparency is ensured. The situation regarding controversial Nord Stream 2 is a kind of different one. A 51% share of Nord Stream 2 belongs to Russian operator Nord Stream 2 AG. Consequently, all decisions on the pipeline are to be adopted after Russia’s approval only and shall comply with its geopolitical agenda.

The funds for the construction of the Baltic Pipe are being allocated by the EU: by the Trans-European Networks for Energy program and Connecting Europe Facility foundation, engaged in the development of infrastructural projects which are a subject of common interest of the whole Europe. The expenditure on the construction of the Nord Stream 2 is mainly covered by Russia’s money. Hence, Gazprom as the main shareholder of the pipeline, invests a sum which covers more than a half of the costs of the project — the remaining part, estimated at 5 billion dollars, is invested by Engie, Royal Dutch Shell, OMV, Uniper and Wintershall.

The Baltic Pipe has become a landmark for Poland in its strive to diminish heavy dependence on Russian gas, inherited from the communist era. Warsaw hopes that, from the beginning of 2023, when the contract between Poland and Gazprom is to be terminated, the Baltic Pipe will replace Russian supplies through Yamal-Europe pipeline and serve as a kind of „stabilizing factor“ when Russian gas monopoly will be rejected.

Source