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Baltic Pipe Project: Deal agreed to build gas pipeline under sea between Denmark…

by ace
Baltic Pipe Project: Deal agreed to build gas pipeline under sea between Denmark...

A major project to transport natural gas from the North Sea to Denmark and Poland has taken a significant step forward.

On Monday, the Italian company Saipem signed an agreement worth 280 million euros to build a gas pipeline in the Baltic Sea to connect the two countries.

Poland imports most of its natural gas from Russia and the new pipeline has been hailed in Warsaw as a way to reduce Moscow's dependence.

The EU has provided 215 million euros in financing for the Baltic Project, which will also allow Poland to supply gas to the Danish market.

Poland's President Andrzej Duda said the pipeline is scheduled to be launched on October 1, 2022.

"This is really very good news for Poland, and not just in the near future, but I believe deeply for decades." said Duda at a press conference on Monday.

"If we are talking about total diversification of gas supplies to Poland, if we are talking about total independence of Poland as a recipient of Russia, this is the milestone on the road to this non-dependency," he added.

From Norway to Poland, via Denmark

The Baltic Pipeline Project will be built to connect gas fields on the Norwegian platform in the North Sea to Trzęsacz, on the north coast of Poland.

The total section under the Baltic Sea between Poland and Denmark is about 275 kilometers long, according to Saipem.

The Baltic Pipe Project says that the construction of the pipeline will help to reduce carbon dioxide emissions and improve air quality in Poland.

Saipem is expected to start working in Poland and Denmark in the second half of this year. The placement of offshore pipes is scheduled for the summer of 2021.

The new deal was announced despite a drop in the price of oil and gas in recent weeks during the coronavirus pandemic.

What does this mean for Russia and Nord Stream?

The builders of the Baltic Tube say the project is "completely different" from Nord Stream 2, another pipeline that connects Russia and Germany across the Baltic Sea.

But Warsaw's announcement appears to signal Poland's intentions to become a regional gas hub for Europe.

The capacity of the new pipeline will be 10 billion cubic meters each year, which is supposed to exceed Poland's domestic needs.

Poland still imports most of its natural gas from Russia, but has taken steps to reduce this dependency to avoid extending its long-term deal with Russian company Gazprom, which is due to expire in 2022.

Duda said the Polish-Danish-Norwegian project, which has a total cost of 1.6 billion euros, will also supply gas to other countries in Central and Eastern Europe, such as Ukraine, easing their dependence on Russian gas.

In addition, the Baltic tube could serve as a key link in the north-south corridor of the European Union, as part of the Three Seas Initiative.

Meanwhile, the controversial Nord Stream 2 pipeline was designed by Moscow to increase gas supplies to Germany, Russia's largest energy customer.

The project was only a few weeks from completion in 2019, before U.S. sanctions threaten to stop work in the last remaining section in Danish waters.

Last week, a Russian ship docked in Kaliningrad after sailing three months in the Pacific to help complete construction.

The Russian Ministry of Energy said in December that the Gazprom pipeline should be launched before the end of 2020.

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