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FSUOGM COMMENTARY FSUOGM

paid by Polish recipients of gas, and the negotiat- Greater obstacles
ing position of ... Gazprom will be strengthened The prospect of potentially having to pay a large
considerably both in relations with Poland and fine in a few years will undermine Gazprom’s
with other EU member states.” share price performance and its credit rat-
ing. But UOKiK’s actions alone will have little
Questionable impact impact on progress at Nord Stream 2. Even so,
How great an impact Nord Stream 2 would have the project faces significant other obstacles to its
on the Polish market is doubtful, however, given completion.
that Warsaw is striving to end its reliance on Rus- The pipeline’s offshore section reached 94%
sian gas anyway within a few years. completion in December last year before the
Poland consumed some 18.6bn cubic metres US imposed sanctions, forcing Swiss pipelayer
of gas last year, while it produced some 4.1 bcm Allseas to halt construction. Russia has its
domestically. A further 9 bcm was supplied by own pipelaying vessels on standby in north-
Gazprom, while the remainder was met with 3.4 ern Europe to finish the job, but it is unclear
bcm of LNG imports and 2.5 bcm via intercon- whether they have the capability to do so with-
nectors with Germany, the Czech Republic and out international assistance. Looming over
Slovakia. the project, a bill is making its way through
Poland’s long-term contract for Russian gas US Congress that would impose even tougher
is due to expire at the end of 2022, and state gas sanctions.
supplier PGNiG does not intend to extend it. Russian authorities say Nord Stream 2 will
While Poland would still be able to make spot be ready to flow gas in early 2021. But Gazprom
purchases from Gazprom after the contract’s is stuck in a ship-or-pay contract with Ukraine
expiry, its government has insisted it will not take until the end of 2024, meaning it will have to pay
any Russian gas at all. to deliver at least 40 bcm per year of gas through
“If we are talking about full diversification the country between 2021 and 2024, regardless
of gas supplies to Poland, we are talking about of how much it actually sends. This will limit how
Poland’s full gas independence from Russia; this much gas it is feasible for the company to supply
is the milestone on the way towards the inde- via Nord Stream 2.
pendence,” Polish President Andrzej Duda said Then there is the EU regulatory headache.
earlier this year. Nord Stream 2 will have to comply with the
To break gas ties with Russia, Poland has a raft bloc's energy law following a court ruling last
of projects underway that will greatly expand its year, which could require Gazprom to provide
gas import capacity over the coming years. It third-party access to its capacity. It is unclear
plans to launch Baltic Pipe in October 2022, a how Russia could ensure this without break-
pipeline from Norway that will provide Poland ing up Gazprom’s monopoly over pipeline
with some 10 bcm of gas annually. A final invest- exports.
ment decision (FID) on the project was taken in Lastly, Germany's support for the pipeline
2018, and early construction work is underway. could crumble, not only in light of the recent
Poland also intends to enlarge its Swinoujscie assassination attempt on Russian opposition
LNG import terminal to take an extra 3.3 bcm figure Alexei Navalny, but more significantly
per year of gas beginning in 2023, and build a because of rising antipathy towards fossil fuels.
second, 4.5 bcm per year terminal in Gdansk by Rather than derail the drive towards cleaner
2026-2027. Baltic Pipe alone could be enough for energy, the coronavirus (COVID-19) crisis has
Poland to cut its Russian gas supplies to zero as prompted governments to set more ambitious
early as 2023, and the government wants to resell targets than ever before. This could lead Ber-
any surplus LNG it imports to Ukraine and its lin to rethink its position on extra gas import
other neighbours. capacity.™

Week 41 14•October•2020 www. NEWSBASE .com P5