22nd March 2004
Tuesday, December 22nd, 2009
Norway at the ready
Norway is in a strong position to contribute to Poland's changing gas supply needs, energy analysts say.
After the Russian Federation and Canada, Norway is the world's third largest exporter of natural gas, although current Norwegian exports to Poland are only a fraction of Russian supplies.
Since an energy crisis earlier this year, when Russia temporarily suspended gas flows to Belarus, disrupting flows to Poland, the public has been clamoring for gas supply diversification. The Buzek government of the 90s, for this very reason, had considered developing a new pipeline across the floor of the Baltic Sea. But the proposed construction project has had difficulty being economically justified, prompting alternative solutions to getting Norwegian gas to the Polish market.
Jan K. Karlsen, senior vice-president for Norway's Statoil Natural Gas Central and North European Market says that at present there is not enough demand in Poland to justify the construction of an expensive new pipeline in the Baltic. "Statoil and the Polish Oil and Gas Company (PGNiG) have jointly found that no basis now exists for such large supply volumes and a direct supply solution," says Karlsen. "We are in dialogue with PGNiG over additional gas deliveries. Such additional volumes would have to be delivered in transit through a new or existing infrastructure."
Due to factors such as the EU's policy to adhere to the Kyoto Protocol, which favors relatively clean natural gas as opposed to more environmentally destructive fossil fuels, Poland's natural gas consumption is expected to steadily rise over the next decade, while disruption of Russian supplies may continue.
The Norwegian Ambassador, Mr. Sten Lundbo, says: "Given the level of proven resources, and measures to enhance recovery, the present level of gas production can be maintained for nearly 100 years". Lundbo states that Norway last year exported a total of 71 bcm, but that the export capacity of the Norwegian system is 90 bcm per year. He points to the pipelines from the Norwegian continental shelf to Germany, Belgium, France and United Kingdom. The Ambassador adds: "In Europe Germany is the largest consumer of Norwegian gas, followed by France, United Kingdom, Belgium, the Netherlands, Italy, Spain, the Czech Republic, Austria, Poland and Denmark".
James Angelus, an American energy consultant and publisher based in Eastern Europe since 1992, says: "There is no option for Poland but to diversify its gas supply sources, even in the short to medium term." Angelus points out that the suspension of the Norway-Poland Baltic floor pipeline should not be an indication that supplies derived from Norway should be ruled out. "The agreement between Poland and Norway in 1999 to build a pipeline under the Baltic Sea could not stand the economic challenge," says Angelus, "...when a land option could be built between the two countries - if one existed." The proposed Bernau-Szczecin line trumpeted by Bartimpex and others is based on this premise, he explains.
Jerzy Szymczak, energy specialist at the Boston Consulting Group, says that Poland should prepare for a higher volatility of gas supply. "This will be driven by the supply side where the projects will get increasingly large and risky," says Szymczak, pointing to multi-billion gas field projects in Russia, such as Yamal and Shtokmanovskoye. "[These] could get delayed because of the lack of a long-term price guarantee for investors. In Poland, solutions for hedging the risk can be found for both the seller and the Polish importer," he says.
From Warsaw Business Journal
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