The surprise decision in early June by Denmark to withdraw the permit for the Danish section of the 10 Bcm/year Baltic Pipe gas link could see Poland stay in the market for Russian gas past the end of its long-term contract with Gazprom.
The pipeline was due to be completed by October 2022, just as state-controlled PGNiG's long-term import contract with Gazprom is set to expire, but the Danish decision -- made to ensure the protection of dormice and bats -- could delay Baltic Pipe's completion.
Would PGNiG be minded to extend its existing contract with Gazprom while the Danish issue around Baltic Pipe -- designed to link Norway with Poland via Denmark -- is resolved? PGNiG says no.
"PGNiG is not involved in negotiation talks about a new contract with Gazprom," a company spokesman told S&P Global Platts.
However, PGNiG has not ruled out buying Russian gas completely. "PGNiG is an entity operating in a competitive environment and it cannot be ruled out that it will consider purchasing gas from Russia under spot deliveries in the future," the spokesman said.
Russia, in the meantime, remains open to continue supplying Poland. "Poland is our reliable counterparty with which we cooperate a lot," Gazprom Export chief Elena Burmistrova said last month.
"We operate within an economic dimension. There are political statements, but we keep working, we keep operating, and we keep negotiating," she said.
PGNiG bought 9 Bcm of Russian gas in 2020, which accounted for around half of Polish gas demand.
Supply diversification away from Russian gas has, however, been Poland's long-stated aim, prompting it to develop an LNG terminal and other European interconnections, as well as to build the Baltic Pipe.
Among its efforts are the expansion of the 5 Bcm/year LNG terminal at Swinoujscie, whose regasification capacity is to be increased to 6.2 Bcm/year in 2022-2023 and further to 8.3 Bcm/year from 2024.
Two interconnectors are also under development -- the 1.9 Bcm/year Poland-Lithuania line and the 5.7 Bcm/year Poland-Slovakia link.
"The implementation of these investments will make it possible to import a sufficient amount of gas also in the event of the assumed increase in gas demand domestically," the spokesman said.
Further, Poland's existing interconnectors already make it possible to satisfy a "significant part" of domestic gas demand with supplies from the south, the west and Ukraine, he said.
Still, PGNiG was looking at importing some 8 Bcm/year of Norwegian gas via the Baltic Pipe and has been building out its upstream position in Norway for a number of years to be able to increase the share of its own equity gas to be delivered via the pipeline.
The likely delay to the pipeline has caused concern among some observers, including the US which said it was alarmed by the sudden Danish decision and its impact on Polish gas supply security.
"We were disturbed to see the stoppage to that project on environmental grounds," Matthew Boyse, Deputy Assistant Secretary at the US State Department, said last week during an Atlantic Council webinar.
"I hope that it is only temporary as it is a very important element to help Poland diversify further as it concludes its Gazprom contract with Russia next year," Boyse said.
According to S&P Global Platts Analytics, Poland would need other new pipelines to operate at full capacity or would likely be in the market for more Russian gas in the event that Baltic Pipe is delayed.
"LNG was already in our forecast model as being well used and the other routes' current firm capacity are not an equal replacement for the Baltic Pipe," it said, referring to existing flows from Germany, the Czech Republic and Ukraine.
But, it said, with the commissioning of new interconnectors with Slovakia and Lithuania from 2022, full usage has the capability to raise import levels to match that of booked capacity by PGNiG on the Baltic Pipe.
Katja Yafimava from the Oxford Institute for Energy Studies also said Russian gas would likely still have a role to play in Poland's energy mix in the short term.
"It seems clear that once its Gazprom contract expires, PGNiG will have to supplement its gas balance by additional spot and short-term contracts," Yafimava said.
"I would not be surprised if PGNiG were to conclude shorter-term new contracts with Gazprom -- for a few years -- despite its past rhetoric. Having achieved a certain degree of diversification, Poland's sensitivities around Russian gas could have become less pronounced," she said.
Yafimava said these sensitivities could be alleviated further by the fact that Russian gas would come at a competitive price given that any new contract would have to be priced off the European hubs after the EU in 2018 made Gazprom's selling pledges binding following its anti-competition probe.
However, Poland's environment minister Michal Kurtyka said during the Atlantic Council webinar that Warsaw's diversification efforts -- and those by other countries in the region -- were ultimately designed to free them from dependence on supplies from "the east."
This, he said, would allow for countries to undertake "sovereign, fully independent actions in the area of gas supply, free from political commitments."