GIPL, the gas pipeline that will allow Poland and Lithuania to break free from Russian gas

Poland and the Baltic States take another step towards independence from Russian energies. The GIPL pipeline (Gas Interconnection Poland-Lithuania) has just been inaugurated on Thursday May 5th, a few days after its commissioning. With a length of 508 km, of which 165 km in Lithuania and 343 km in Poland, it will eventually be able to transport around two billion cubic meters of gas in both directions. It is expected to reach full capacity next October. Thanks to the existing gas networks, it will even be able to connect Latvia, Estonia and Finland.

The decision to build this infrastructure is not related to the war in Ukraine, since the construction site began in 2020. Nevertheless, it is timely for those countries that want to stop importing Russian energy. The Baltic states have also stopped importing Russian gas since the beginning of April, and the three states are then relying on their current underground gas reserves.

“Today we are dedicated to our energy independence”, welcomed Lithuanian President Gitanas Nauseda during an official ceremony organized in Jauniūnai, near Vilnius, which brought together senior officials from Poland and the Baltic countries. And to insist: “We are strengthening our resistance to political pressure. »

Polish President Andrzej Duda said: “This connection line is a response to blackmail” Energy that Moscow exerts on Europe. As a reminder, on April 27, Russian gas giant Gazprom halted all gas supplies to Poland and Bulgaria, threatening shortages in Central and Eastern Europe, but also across the European continent.

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Another step towards independence with Russian energies

The GIPL gas pipeline, which cost around EUR 500 million and is largely funded by the European Union, represents one of the alternative gas sources for Poland and is expected to cover 10% of the country’s annual needs. The Polish government, which consumes up to 21 billion m3 of gas per year, declared itself “ready to face the total cut too” Russian gas. According to the executive, Poland’s energy supply is indeed guaranteed without having to resort to gas reserves and without interrupting access to consumers.

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Warsaw had already announced in March that it wanted to free itself from economic dependence on Russia. Polish Prime Minister Mateusz Morawiecki listed a number of so-called measures “Anti-Putin Shield” intends, after him, to “Storting the Polish and European Economy”, but also to contain inflation, to protect employment and – even now – to resist it “Gas Extortion” from Moscow.

The Polish state wants to invest three billion zlotys (636 million euros) in the state-owned company Gaz-System, which not only builds and operates the gas pipelines, but also the Liquefied natural gas (LNG) terminal. from the port of Świnoujście in the west of the country.

This terminal was established in 2016 and in 2020 its capacity was increased by 50% to 7.5 billion cubic meters per year. To name an order of magnitude, the Polish gas company has received about from Russia 9 billion cubic meters of gas per year or 45% of national demand – Poland’s total annual gas consumption is around 20 billion cubic meters.

In particular, Gaz-System is building the Baltic Pipe gas pipeline, which should bring Norwegian gas to Poland before the end of the year and further reduce the country’s dependence on Russian gas.

On the Baltic side, the opening of the gas pipeline provides Lithuania with a second gas source independent of Moscow, as the country has had a liquefied natural gas (LNG) terminal since 2014. According to Eurostat, Russia accounted for 93% of Estonian natural gas imports, 100% of Latvian imports and 41.8% of Lithuanian imports in 2020.

Russian gas supplies to Europe fell by 27% between January and April

Europe relies on LNG

Since Russia’s invasion of Ukraine at the end of February, Europe has been trying to massively increase its imports of LNG, which has the advantage of being able to be transported by ship from anywhere in the world, in order to reduce its dependence on Russian gas, which is mainly supplied by sea gas pipeline arrives.

“The LNG market is growing rapidly and recent price increases indicate a structural imbalance between demand and supply growth,” announced this Thursday, May 5th, the President of the International Group of Liquefied Natural Gas Importers (GIIGNL), the professional association of the sector, Jean Abiteboul.

Importing LNG requires the construction of heavy terminals or at least the purchase of floating storage and regasification units (FSRU) for imported LNG. Announcements to buy or rent such units have multiplied in recent weeks as every country wants to have such a structure as soon as possible.

However, finding a floating unit can prove difficult as they are rare and in high demand. The building of ships is conceivable, but the shipyards that produce these types of units exist mainly in Asia and their order books are already well filled for the next few years.

LNG: World imports, already rising in 2021, set to rise further to ditch Russian gas

(With AFP)