Baltic Pipe Project

From Global Energy Monitor
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Baltic Pipe Project is a proposed pipeline project that would transport natural gas from Norway to Poland via Denmark.[1]

Location

A 105-110 kilometer long, new offshore gas pipeline from Norway’s pipeline Europipe II in the North Sea to a receiving terminal located North of Varde in Denmark. Expansion of the Danish transmission system with a new gas pipeline, approximately 210-230 kilometers long, which will run between Egtved in Jutland and the South-eastern part of Zealand, with a compressor station in the South-eastern part of Zealand. A 260-310 kilometer long offshore gas pipeline in the Baltic Sea between Denmark and Poland.[2][3]

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Project Details

  • Owners: Energinet (50%) and GAZ-SYSTEM S.A. (50%)[4]
  • Proposed capacity: 10 billion cubic meters per year
  • Length: 575-650 kilometers (average of estimates 612.5)[5]
  • Cost: €1.6 billion (US$1.94 billion)[6]
  • Financing: A consortium of commercial banks and up to €267 million in European Union grants via the Connecting Europe Facility[6]
  • Status: Construction[7]
  • Start Year: 2022[8][9]

Background

The Baltic Pipe is a proposed 650 kilometer (maximum) pipeline being developed by Energinet and Gaz-System with a 120km-long offshore natural gas pipeline portion that will be built between Rødvig, Denmark, and Niechorze, Poland. The final investment decision is scheduled to be reached in 2018, while the project's commission date is October 2022.[10] The Baltic Pipe Project will allow transport of gas from Norway to the Danish and Polish markets, as well as to end-users in neighboring countries. At the same time, the Baltic Pipe Project will enable the supply of gas from Poland to the Danish and Swedish markets.[11]

In August of 2019, Poland’s gas grid operator Gaz-System agreed to buy a set of compressor units for 550 million zlotys ($141 million) from U.S. company Solar Turbines for its planned link to Norway’s gas fields. Poland sees the Baltic Pipe as a way to diversify its gas supply, most of which is currently imported from Russia under a long-term contract with Gazprom that expires in 2022. The Baltic Pipe, as well as increased supplies of liquefied natural gas (LNG) via a Baltic Sea terminal at Świnoujście Polskie LNG Terminal, are designed to help Poland replace the Russian deliveries.[12] The project also provides Poland with an opportunity to become a central European gas hub.[6]

Part of the project was approved as a Project of Common Interest (PCI) by the European Commission, meaning it will be eligible to receive public funding. The PCI portion of the project will be a total of 204 kilometers (200 onshore, 4 offshore), and 10 billion cubic meters/year.[13]

In May 2020, the project achieved a complete set of construction permits following Sweden's approval for the pipeline to pass through 85 kilometres of the Swedish exclusive economic zone of the Baltic Sea. However, the planned October 2022 construction completion date may be delayed as the Baltic Pipe crosses both the Nord Stream 1 and 2 pipelines in Danish waters and requires the approval of the operators of both Nord Stream pipelines to do so. Approval from the Nord Stream 1 consortium is expected because it is owned by a consortium of Gazprom and EU-based companies, but approval from the Nord Stream 2 project may be more complicated as it is wholly-Gazprom operated.[14]

In autumn 2020, construction work started to prepare the pipe landfalls in both Poland and Denmark. By the end of November it was reported that short sections of the pipeline had been laid on the east and west coasts of the Jutland peninsula.[7]

Financing

In June 2020, the Financial Times reported that the project promoters were confident of securing financing for the project, with Gaz-System in talks with about 15 banks over the financing of its investment programme, which includes its share of the Baltic Pipe costs. Overall funding from European Union grants could rise to up to €267 million.[6] In April 2019 Poland received a €214.9 million grant from the EU's Connecting Europe Facility (CEF) to help build its portion of the pipeline.[15] The project was earlier awarded three CEF grants for a feasibility study and preparatory works: €387,374 in 2015[16]; €33,149,601 in 2017[17]; €18,300,000 in 2018.[18]

The international law firm Norton Rose Fulbright disclosed in July 2020 that it had advised a consortium of ten banks on the US$ 1.4 billion financing for Gaz-System which will be used as a stable source of funding for projects by the company to implement its 2020-2025 investment strategy, including the Baltic Pipe and the expansion of the Świnoujście Polskie LNG Terminal. The banks involved in the financing are: Alior Bank S.A., Bank Gospodarstwa Krajowego, Bank Millennium S.A., Bank of China (Luxembourg) S.A. Oddział w Polsce, BNP Paribas Bank Polska S.A., CaixaBank, S.A. (Spółka Akcyjna) Oddzial w Polsce, China Construction Bank (Europe) S.A. (Spółka Akcyjna) Oddział w Polsce, Credit Agricole Bank Polska S.A., mBank S.A. and Powszechna Kasa Oszczędności Bank Polski S.A.[19]

Technical Details

The Baltic Pipeline will include the following:

  • A 105-110 kilometer long, new offshore gas pipeline from Norway’s pipeline Europipe II in the North Sea to a receiving terminal located North of Varde in Denmark.
  • Expansion of the Danish transmission system with a new gas pipeline, approximately 210-230 kilometers long, which will run between Egtved in Jutland and the South-eastern part of Zealand.
  • A compressor station in the South-eastern part of Zealand.
  • A 260-310 kilometer long offshore gas pipeline in the Baltic Sea between Denmark and Poland.[5]

Identifiers

The European Network of Transmission System Operators for Gas (ENTSOG) lists the project as "TRA-F-780" (Baltic Pipe project – onshore section in Denmark), "TRA-A-1173" (Poland - Denmark interconnection (Baltic Pipe) - onshore section in Poland), "TRA-A-271" (Poland - Denmark interconnection (Baltic Pipe) - offshore section) and "TRA-A-394" (Norwegian tie-in to Danish upstream system).[20]

Its EU PCI lists it as 8.3.2.[20]

SciGrid_gas's combined IGG gas transmission network data set refers to the pipeline as INET_PL_9180, INET_PL_9181, INET_PL_9182, INET_PL_9183, INET_PL_9184, INET_PL_9185, INET_PL_9186, INET_PL_9187.[3]

Contractors

In July of 2019, DNV GL won a major contract to provide independent verification services for the Danish transmission system operator Energinet’s section of the Baltic Pipe project, offshore Denmark. DNV GL’s contract includes independent verification and submarine pipeline certification to the DNV GL certification regime DNVGL-SE-0475. The acceptance criteria are the Danish Continental Shelf Law, DNVGL-ST-F101 and the suite of underlying DNV GL standards and recommended practices. The work will take place during the engineering, procurement, construction, installation, hook-up and commissioning phases of pipeline development over the next three years.[21]

In August of 2019, Energinet contracted Corinth Pipeworks to supply offshore linepipe for the project. Corinth Pipeworks will manufacture 114 km (71 mi) of 32-inch and 36-inch SAWL steel pipes (43,000 tons in total) with a three-layer polyethylene anti-corrosion coating, epoxy lining for flow assurance, and concrete weight coating with sacrificial anodes and bends. Deliveries are due to start in late-2019 and continue through 2021, when the pipes will be laid through Danish waters.[22]

In April 2020, Gaz-System signed a contract with Italian construction company Saipem to lay the offshore pipeline, with work expected to start in the second half of 2020.[14]

Opposition

In July 2020, activists from the Baltic Pipe Nej Tak campaign occupied one of the project's pre-construction sites. Baltic Pipe Nej Tak (‘Baltic Pipe No Thanks!’) is a campaign platform for the wide movement against new fossil infrastructure, and is specifically focused on opposing construction of the Baltic Pipe gas pipeline.[23] The campaign post updates on their actions to their Facebook page.[24]

Protesters in Copenhagen march against the proposed Baltic Pipe in Jan. 2020[25]
Danish activists' protest against the proposed Baltic Pipe project, July 2020

Articles and resources

References

  1. Baltic Pipe, Wikipedia, accessed March, 2018
  2. Baltic Pipe: Gas Pipeline, Connecting Denmark and Poland With Norway's Gas Fields, Energinet, accessed March 2018
  3. 3.0 3.1 Diettrich, Pluta, Medrjoubi (July 23, 2020). "The combined IGG gas transmission network data set". DLR Institute for Networked Energy Systems. Cite journal requires |journal= (help)CS1 maint: multiple names: authors list (link)
  4. "Baltic Pipe Gas Pipeline | Project | IJGlobal". ijglobal.com. Retrieved 2020-09-18.
  5. 5.0 5.1 Baltic Pipe: Gas Pipeline, Connecting Denmark and Poland With Norway's Gas Fields, Energinet, accessed March 2018
  6. 6.0 6.1 6.2 6.3 James Shotter, Polish gas network close to fully financing Baltic Pipe to Norway, Financial Times, Jun. 9, 2020
  7. 7.0 7.1 Leszek Kadej, Baltic Pipe laid under the beach on the west coast of Denmark, wysokienapiecie.pl, Nov. 23, 2020
  8. Shailaja A. Lakshmi, DNV GL Wins Baltic Pipe Project Marine Link, June 20, 2019
  9. Baltic Pipe Project (August 2020). "Baltic Pipe Project: Offshore gas pipeline – implementation stage" (PDF). Retrieved December 10, 2020.
  10. Baltic Pipe Project, Hydrocarbons-Technology, accessed March, 2018
  11. Baltic Pipe Project, Baltic Pipe, accessed March 2018
  12. Poland's gas grid operator buys first equipment for Baltic Pipe Reuters, August 14, 2019
  13. Reinforcement of Nybro — Poland/Denmark Interconnection European Commission, accessed December 10, 2019
  14. 14.0 14.1 All Baltic Pipe gas link permits in place after Swedish approval, S&P Global, May 11, 2020
  15. Poland wins €215m EU grant for gas link to Norway, Euractiv, Apr. 15, 2019
  16. Feasibility Study regarding the PCI Poland - Denmark interconnection "Baltic Pipe" TRA-N-271..., European Commission, accessed Dec. 7, 2020
  17. Preparatory works for the Baltic Pipe Project up to obtainment of all necessary permission(s) in Poland and in Denmark, European Commission, accessed Dec. 7, 2020
  18. Reinforcement of the national gas transmission systems in Poland and Denmark for the Baltic Pipe Project, European Commission, accessed Dec. 7, 2020
  19. Norton Rose Fulbright advises a consortium of banks on financing for GAZ-SYSTEM, Poland’s designated natural gas transmission system operator, Norton Rose Fulbright press release, July 2020
  20. 20.0 20.1 European Network of Transmission System Operators for Gas (2020). "TYNDP - Annex A - Projects Tables RPJ007_NS_2020 - entsog". ENTSOG. Retrieved September 16, 2020.
  21. Shailaja A. Lakshmi, DNV GL Wins Baltic Pipe Project Marine Link, June 20, 2019
  22. Offshore Staff, Corinth to manufacture Danish section of Baltic Pipe Offshore, August 28, 2019
  23. [1] Baltic Pipe Nej Tak campaign website, accessed July 2020
  24. "Baltic Pipe NEJ TAK". www.facebook.com. Retrieved 2020-09-29.
  25. Arentsen, Ida Guldbæk (January 8, 2020). "Modstanden mod Baltic Pipe er nødvendig og retfærdig". Altinget. Retrieved August 11, 2020.

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