Poland and the Baltic countries are taking another step towards independence from Russian energies. The GIPL (Gas Interconnection Poland-Lithuania) pipeline was just inaugurated on Thursday 5 May, a few days after it was put into service. 508 km long, including 165 km in Lithuania and 343 km in Poland, it will eventually be able to transport approximately two billion cubic meters of gas in both directions. It is expected to reach full capacity next October. Thanks to the existing gas networks, it will even be able to connect Latvia, Estonia and Finland as well.
The decision to build this infrastructure is not linked to the war in Ukraine since the construction site started in 2020. It is nevertheless timely for these countries which want to stop their imports of Russian energy. The Baltic countries have also stopped importing Russian gas from the beginning of April, the three States then counting on their current reserves of gas stored underground.
“Today, we dedicate our energy independence”, welcomed the Lithuanian President Gitanas Nauseda, during an official ceremony organized in Jauniūnai, near Vilnius, which brought together senior officials from Poland and the Baltic countries. And to insist: “We are strengthening our resistance to political pressure. »
Polish President Andrzej Duda said: “This interconnector is a response to blackmail” energy exerted by Moscow on Europe. As a reminder, on April 27, the Russian gas giant Gazprom suspended all its gas deliveries to Poland and Bulgaria, posing the threat of a shortage in Central and Eastern Europe but also on the entire European continent.
One more step towards independence with Russian energies
The GIPL gas pipeline, the cost of which amounted to approximately 500 million euros, largely financed by the European Union, provides one of the alternative gas sources for Poland and should cover 10% of the annual demand of the country. The Polish government, which uses up to 21 billion m3 of gas per year, declared itself “ready to face even the total cut” Russian gas. Poland’s energy supply is indeed assured, according to the executive, without the need to draw on gas reserves and without interruption of access to consumers.
As early as March, Warsaw announced that it wanted to get out of its economic dependence on Russia. Polish Prime Minister Mateusz Morawiecki listed a series of so-called measures “anti-Putin shield” intended, according to him, to “derussifying the Polish and European economy”, but also curbing inflation, protecting employment and resisting – already – the “gas blackmail” from Moscow.
The Polish state intends to invest three billion zlotys (636 million euros) in the state-owned company Gaz-System, which builds and operates not only the gas pipelines but also the liquefied natural gas (LNG) terminal from the port of Swinoujscie, in the west of the country.
This terminal was created in 2016, and in 2020 its capacity was increased by 50% in 2020, bringing it to 7.5 billion cubic meters per year. To give an order of magnitude, so far the Polish gas company received from Russia about 9 billion cubic meters of gas per year, or 45% of national needs – Poland’s total annual gas consumption is around 20 billion cubic meters.
Gaz-System is notably building the Baltic Pipe gas pipeline which should bring Norwegian gas to Poland before the end of the year and further reduce the country’s dependence on Russian gas.
On the Baltic side, the opening of the gas pipeline represents for Lithuania a second source of gas supply independent of Moscow, the country having had a liquefied natural gas (LNG) terminal since 2014. According to Eurostat, in 2020 Russia accounted for 93% of Estonian natural gas imports, 100% of Latvian imports and 41.8% of Lithuanian imports.
Europe bets on LNG
Since the invasion of Ukraine by Russia at the end of February, Europe has been seeking to massively increase its imports of LNG, which has the advantage of being able to be transported by ship from anywhere in the world, to reduce its dependence to Russian gas, which arrives mainly by gas pipeline.
“The LNG market is growing rapidly and recent price increases indicate a structural imbalance between demand and supply growth,” indicated this Thursday, May 5 the president of the International Group of Liquefied Natural Gas Importers (GIIGNL), the professional association of the sector, Jean Abiteboul.
Importing LNG requires building heavy terminals, or at least buying floating storage and regasification units (FSRU) for imported LNG. Announcements for the purchase or rental of such units have multiplied in recent weeks, each country wanting to have this type of structure as soon as possible.
But finding a floating unit may prove to be complicated since they are rare and the demand is very high. The construction of ships could be envisaged, but the shipyards producing this type of unit exist mainly in Asia and their order books are already full for the next few years.
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