The state company PGNiG signed the 24-year deal with American supplier Cheniere during a ceremony in Warsaw attended by U.S. Energy Secretary Rick Perry and Polish President Andrzej Duda.
“This is a sign across Europe that this is how your energy security will be developed, your energy sources diversified,” Perry said before the deal was signed.
Perry is visiting several countries of central and eastern Europe to expand on energy partnerships in the region, the Department of Energy said.
The value of the deal with the Polish company was not disclosed, in line with traditional secrecy for such energy deals.
However, Piotr Wozniak, the president of PGNiG’s management board, said the price is 20-30 percent lower than what Poland pays its current supplier in Russia.
Under the deal, Poland will receive some 700 million cubic meters of gas from 2019 through 2022, and 39 billion cubic meters from 2023 through 2042. Poland’s annual consumption of gas is almost 16 billion cubic meters, 25 percent of which is covered from Poland’s own deposits.
Wozniak said the deal would also provide a safety net to protect neighboring Ukraine from unexpected breaks in Russian gas deliveries. PGNiG is planning two more deals for U.S. gas deliveries, he said.
Poland and Ukraine feel especially vulnerable due to their dependence on Russia energy supplies, which Moscow has used as political leverage in the past.
Their anxieties have increased because of a German-Russian project to build Nord Stream 2, a second pipeline under the Baltic Sea that would deliver gas directly from St. Petersburg to Germany, bypassing Ukraine and Poland.
Polish ruling party leader Jaroslaw Kaczynski sent a message that was read out saying he was “happy that the deal will increase Poland’s energy security.”
Deliveries of liquefied natural gas will begin in 2019 but will not reach full volume for several years, PGNiG said.
The gas will be delivered by ship from terminals in Louisiana and Texas to a liquefied natural gas terminal in Swinoujscie, in the northwest, on Poland’s Baltic coast.
In October, PGNiG signed a separate long-term contract for the purchase of some 40 million tons, or over 50 billion cubic meters, of liquefied natural gas from Louisiana-based Venture Global Calcasieu Pass and Venture Global Plaquemines LNG.
That was to replace a deal expiring with Russia’s Gazprom and was the first such deal in central and eastern Europe.
Project to build Nord Stream 2 – Delay on the horizon
The delays of Nord Stream 2 have been on the horizon for a long time.
The first signals appeared in May 2018, when it turned out that the investment in a new gas pipeline from Russia to Germany with a capacity of 55 billion cubic meters.
Every year, it does not get building permits in the Scandinavian countries as easily as its architects would expect.
The media leaked reports of a possible delay of the German branch – EUGAL, which is necessary to distribute gas from Nord Stream 2 through Central and Eastern Europe, which is the main target market for this gas pipeline, to be built by the end of 2019.
Even a year of delay?
Mariusz Marszałkowski from the College of Europe in Natolin and a graduate of the Naval Academy in Gdynia used public data to determine whether Nord Stream 2 AG responsible for the construction of a new gas pipeline from Russia to Germany with the same name will manage the project on the deadline 2019.
– I compared the marine units contracted for the construction of Nord Stream 2 with historical data on the previous project, ie Nord Stream 1, which is already operating – says our interlocutor. – It is highly unlikely that Nord Stream 2 will be operational by the end of 2019. Pressure tests and acceptance of investments may take about half a year, as in the case of Nord Stream 1.
Marszałkowski reminds that the main contractor for the work consisting in laying the undersea pipes is the company Allseas. – It will perform a stretch in the Gulf of Finland. The work has begun in recent days.
It will also implement the longest stretch of about 850 km on the open sea – he calculates.
– Meanwhile, Saipem is to do work on the German shelf, which I think could actually start.
The scientist calculated that three pipe-laying vessels worked on the construction of Nord Stream 1: Solitaire (Allseas), Castoro 10 and 7 (Saipem).
The latter has been withdrawn. Currently, two of them work in the Gulf of Greifswald and Finland respectively. – Gazprom has contracted six vessels at Allseas, out of which three are three main and three auxiliary – says Marszałkowski.
– The problem starts here.
Allseas can use only two units outside Solitaire: Audacia and Pioneering Spirit. The first along with the accompanying ship Fortitude has been in the direction of the Hague for over a week.
The second is working in the Black Sea, probably at the construction of Turkish Stream – continues the interlocutor of BiznesAlert.pl. – I think that due to this, by the end of 2019, not even one of the two strands of Nord Stream 2 will be launched – he argues.
This conclusion comes from the comparison of the Nord Stream 1 construction statistics.
It started in April 2010.
It began with the construction of a seagoing section in the Swedish exclusive economic zone.
In June of that year, Castoro 10 started to work in German waters, and Solitaire in September.
– Meanwhile, at Nord Stream 2 construction outside the Finnish stretch has begun with a delay or has not moved at all.
With optimistic assumptions that the construction of offshore parts would start in September and the pace would be optimistic for a 3 km gas pipeline per day, the central part will not be ready until June 2019.
Only that you can not see that the work on its implementation has begun – counts Marszałkowski. This would mean that the delay of Nord Stream 2 will be at least half a year.
In his opinion, it will be difficult for Denmark to block the project, but it may delay it. – Denmark may delay the approval of construction in its territorial waters. For the blockade, it would need political determination and use of the environmental argument allowed by the Espoo Convention.
In the Borhnolmic depths there are chemical weapons depots – indicates the interlocutor of BiznesAlert.pl. – Sweden has run out of that determination – he says.
In the scientist’s belief, starting work without Denmark’s consent may be a form of pressure to convince the Danes that they would be better off agreeing to build in their exclusive territorial waters, which will benefit financially than to block consent, which will not stop the project anyway.
In addition, this may be a way to avoid US sanctions by formally starting construction. Obligations may not necessarily cover projects already started.
However, if Nord Stream 2 will have to wait for the revision of the route, as we wrote in BiznesAlert.pl, the delay in this respect may reach half a year. Together with this resulting from the later start of construction, it can turn into a twelve-month extension of the project.
BiznesAlert.pl business partners in the industry responsible for the construction of gas pipelines are less sure about delays in the Baltic Sea. In their opinion, they are possible to catch up thanks to the exceptional technical efficiency of the Solitaire ship.
However, problems for Nord Stream 2 may appear elsewhere, i.e. in the construction of gas pipelines supplying the raw material for a new project from the territory of Siberia via the Uchta-Torżok and Uchta-Vyborg connections, which may extend until 2020 and in German territory in the case of the said EUGAL legends, which can also be created at the beginning of the next decade.
This means that although it is difficult to indicate today how to stop Nord Stream 2, its delay is real.
Even if the construction of the sea section will accelerate and the existing backlogs will be removed, there may be problems with providing the accompanying infrastructure, which is to be built around 2020.
An indirect scenario is possible, in which Nord Stream 2 will start working in 2019, but it will not be fully operational from the very beginning, for example it will use only one of two threads. However, in the worst-case scenario for Russians, problems will accumulate and the bus will be built at least a year later.
This uncertainty means that Gazprom will be forced to negotiate temporary solutions with current transit countries, such as Poland and Ukraine, which terminate transmission contacts in 2019.
This will weaken the position of the Russian side, which its partners will be able to use to improve the terms of cooperation.