Warsaw — The planned 10 Bcm/year Baltic Pipe project that will connect the Norwegian, Danish and Polish gas grids now has a complete set of construction permits, the Polish natural gas transmission system operator Gaz-System said Monday, after approval was granted by Sweden.
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Register NowIn a statement, Gaz-System said permitting was completed with the approval by Sweden for the 275 km pipeline to pass through 85 km of the Swedish exclusive economic zone of the Baltic Sea.
Poland plans to use Baltic Pipe to directly import Norwegian gas and end its decades-long dependence on Russian pipeline gas.
"This decision has shown that the Swedish government recognizes the project's importance, not only for Poland and Denmark, but also for the whole European Union, for tightening cooperation among EU member states and, perhaps most of all, for becoming independent of gas supplies from Russia," Gaz-System President Tomasz Stepien said.
The Polish and Danish authorities have already approved construction of both the onshore and offshore parts of the project, Gaz-System said.
In April, Gaz-System signed a contract with Italy's Saipem to lay the offshore pipeline, with work expected to start in the second half of this year. Completion is scheduled in October 2022, when Polish state gas company PGNiG's long-term gas supply contract with Gazprom expires. PGNiG has reserved 8.2 Bcm/year of Baltic Pipe's capacity.
Nord Stream crossings
However, the potential for a delay beyond October 2022 exists because Baltic Pipe crosses both the Nord Stream 1 and 2 pipelines in Danish waters and it requires the approval of the operators of both Nord Stream pipelines to do so.
Market analysts in Poland do not anticipate problems obtaining that approval from Nord Stream 1, because it is owned by a consortium of Gazprom and EU-based companies, but they have warned of the potential for delay in obtaining approval from the wholly-Gazprom operated Nord Stream 2 project.
However, in December last year, Gaz-System and Gazprom agreed the technical conditions for the crossing of Baltic Pipe and Nord Stream 2.
Baltic Pipe is a joint venture between Gaz-System and its Danish counterpart, Energinet, and will cost between Eur1.6-2.1 billion. Apart from the 275 km Baltic Sea pipeline, the project will also include the expansion of the Danish grid and a connection to Norway's Europe II pipeline in the North Sea.