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I UNDERSTAND
English Section

Italy’s Saipem lands deal to build Baltic Pipe: Polish president

04.05.2020 17:50
Italian company Saipem has landed a massive deal to build the Baltic Pipe, a strategic gas link from Denmark to Poland, the Polish president announced on Monday.
Audio
  • Italy’s Saipem lands deal to build Baltic Pipe: audio report
Polish President Andrzej Duda is seen on a television screen as he holds a news conference in Warsaw on Monday morning.
Polish President Andrzej Duda is seen on a television screen as he holds a news conference in Warsaw on Monday morning.Photo: PAP/Wojciech Olkuśnik

Andrzej Duda said at a televised news conference that Polish state-owned gas grid operator Gaz-System had selected Italy’s Saipem as the contractor to build the offshore part of the pipeline.

He added that the project, “a milestone on the road to fully diversifying gas supplies” for Poland, was now ready to get under way "in the coming days."

Italy’s Saipem, a provider of oil and gas services, said the deal was worth EUR 280 million, Poland’s PAP news agency reported.

The news came after Poland’s Gaz-System last month said it had obtained a complete set of domestic permits needed to build the Baltic Pipe.

The project to build the pipeline is part of Warsaw’s efforts to diversify gas supplies and reduce the country’s energy dependence on Russia.

Poland’s Gaz-System in January signed a deal in Warsaw for the supply of pipes for the planned new gas link.

Gaz-System in August last year signed a contract with US manufacturer Solar Turbines on the delivery of key components for the Baltic Pipe.

Piotr Naimski, the Polish government's pointman on strategic energy infrastructure, at the time hailed the EUR 115 million contract as “a milestone on the road to constructing the Baltic Pipe.”

Under a deal signed in Brussels in April, the European Union agreed to provide EUR 215 million in funds to subsidise the planned gas link.

Polish Prime Minister Mateusz Morawiecki at the time hailed the Baltic Pipe as a "breakthrough project" that would take Poland's energy security to the next level.

The European Commission has said that “the Baltic Pipe project, a new, bi-directional offshore gas interconnection between Poland and Denmark, will be crucial for security of supply and market integration of the region.”

Work to build the Baltic Pipe, which would connect the Polish and Danish gas transmission systems and enable Poland to access gas from Norway, is expected to start later this year and be completed by October 1, 2022.

Once built, the Baltic Pipe will have the capacity to carry 10 billion cubic metres of natural gas from Norway to Poland annually.

The Polish president last year described the pipeline as "a strategic project for Poland’s energy transformation, as well as for the energy security of the entire Central and Eastern Europe region."

Poland’s annual gas usage is estimated at around 17 billion cubic metres, of which half is imported from Russia’s gas giant Gazprom under a contract expiring in 2022.

In May last year, the Polish prime minister said his country aimed to wean itself off Russian gas over the next three to four years.

Polish state-run oil and gas company PGNiG in November told Gazprom it would not renew a long-term deal on Russian gas imports when the contract expires at the end of 2022.

(gs)

Source: PAP, TVP Info

Click on the audio icon above to listen to a report by Michał Owczarek.