$2 Billion Baltic Pipe Gas Pipeline Project Gets Green Light

Written by Martin Lynch, European News Editor for Industrial Info (Galway, Ireland)--Construction is to begin on a key gas pipeline from Norway into the European Union (EU) following positive investment decisions by the Polish and Danish gas transmission system operators, Gaz-System and Energinet.

Work will now begin on the 900-kilometre (km) Baltic Pipe project, which will enable the transmission of natural gas from Norway to Poland, Denmark, Sweden, the Baltic states and Central and Eastern European regions. The bi-directional pipeline will allow reverse transmission from Poland to Denmark and Sweden. Prior to the final investment decision, Energinet signed an agreement with Gassco (its Norwegian counterpart) regarding construction of the tie-in to the Norwegian gas pipeline, Europipe II, and a pipeline to the Danish west coast that will enable gas flow from Norway to Denmark and Poland. Europipe II currently connects Norway and Germany. "A spur to Denmark will open a new landfall for Norwegian gas and thereby lay the basis for direct deliveries to new markets," commented Øystein Rossebø, vice president for development and innovation at Gassco. "Our most important concern in this process is to safeguard the integrity of Norway's entire gas transport system."

The project, which was first proposed in 2016, will cost around 2 billion euro ($2.28 billion) in total and involves pipe laying undersea and underground across a number of countries. Work will start next year with full commissioning expected by October 2022. Annual gas volumes transported in the Danish transmission pipes may increase to ten billion cubic metres (bcm)--four times what Denmark currently consumes.

"The construction of Baltic Pipe will not only benefit consumers in Poland and Denmark, but will also be beneficial to both countries," said Thomas Egebo, chief executive officer of Energinet. "The new gas interconnector will further strengthen and integrate the European gas market. Moreover, Baltic Pipe may contribute to achieving European climate goals."

Baltic Pipe is in line with the EU energy policy and has received significant EU funding under the Connecting Europe Facility Programme (CEF). The partners highlight that the project will provide direct access for Eastern and Central Europe to gas deposits in Norway, and will improve the "supply security by opening a permanent corridor for the delivery of gas while increasing the competitiveness and price pressure among gas suppliers." Today those regions, along with most of the EU, are heavily reliant on Russian oil and gas, something the EU is working on changing by supporting a large number of new pipeline and liquefied natural gas projects. For additional information, see June 12, 2018, article - Two European Gas Pipelines Win EU Funding.

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