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Poland's Newfound 'Independence' From Russian Gas Is an Empty Boast

Never mind the fact LNG it would import via its soon to be completed LNG terminal is far more expensive - such imports could not fully replace Russian gas even just on technical grounds

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Originally appeared at Natural Gas Europe

Poles boast that upon completion of the LNG terminal construction in Świnoujście will provide one hundred percent independence from Russian gas supplies. If Russia will not cooperate, then Poland will bring the raw material from another direction, using reverse flow services or the LNG terminal. However, the problem lies in the fact that Warsaw has already revealed the plan that could undermine the diversification of gas supplies to Poland.

Nord Stream 2 proposes to become a new route for supplies to European customers that will allow to transmit gas that at present is being sent through Ukraine. Initially, the Russians announced such a move for 2019, but now they are talking only about the possibility of reduction, probably having realised that some of the gas agreements with European customers envisage a certain gas reception point on the western border of Ukraine and that their term goes beyond the announced censorship. That is why transit through the territory of our neighbour may be decreasing gradually.

However, one should consider a scenario in which Gazprom will want to cease the supplies to Poland through the Yamal pipeline in order to reduce the importance of our country in the gas transit, analogous to the move towards Ukraine. The agreement for gas supplies from the Russians terminates in 2022, and then it will be possible to change the reception points. It could be that in accordance with the probable trend of building the market for Nord Stream,Gazprom will want to supply Poland with the raw material through Germany, increasing the transit importance of our western neighbour, and decreasing ours. It may then cause a problem increasingly discussed by officials in Warsaw and Brussels. With the help of the German infrastructure, Gazprom can blow up the Polish program of diversification of gas supplies – according to the letter of the law. The case is already being discussed by the Ministry of Economy, the Energy Regulatory Office and other key players on the gas market in Poland. They got the European Commission interested in the subject and expect preventive actions.

Under the agreement with Gascade, Gaz-System has expanded the measuring station in Mallnow, so that the Poles have the ability to physically bring natural gas from Germany in the amount of 5.4 bln m3 per year. The European Commission has co-financed the project to the tune of EUR 400,000, because it opens the opportunity for Poland to bring gas from new sources, for example, in the case of drying out of the Yamal pipeline. In September 2014, there was a temporary reduction of supplies through Yamal to Poland by about half. We could test then the strategic value of Mallnow, because we were bringing the missing gas from the German stock exchanges, the price of which was more favourable than the Russian offer, which brought earnings to PGNiG and Gaz-System. There is, however, nothing to be happy about.

On 14 July 2015, there was a technical disruption in supplies through the German reverse flow service. It lasted only six hours and occurred during scheduled on 11-20 July technical break in the operation of Nord Stream. The capacity of the compressor station in Mallnow was reduced by only five percent. But it was probably then that the Poles realised that the German reverse flow service was not a panacea and could also be blocked. 

Although Gazprom, Germany’s BASF and Austria’s OMV have agreed an extensive exchange of access to the Yamal deposits for shares in storage facilities in Germany and Austria, what is important for the Poles is a facility that is not an element of the deal, because it is already under the control of the Russian company. Katharina is a gas storage facility in Peissen (Saxony). Gazprom has a 10.5 percent of shares in Verbundnetz Gaz AG, which in turn holds half of the shares in Katharina. The other half of shares in the facility belongs to Gazprom Germania – a subsidiary of Gazprom. Tanks have a capacity of 110 mln m3. Until 2024, it will increase to 600 mln m3. The storage facility is connected to the JAGAL pipeline (Yamal gas connection). Its operator is Gascade. Gazprom holds a 49.98 percent of shares in this company, and the rest is held by Germany’s BASF. The same operator manages German branches of the Nord Stream pipeline – OPAL and NEL – and the Baltic main itself. JAGAL is connected with the Yamal pipeline.

Under the Gascade transmission manual, competing capacities with priority in the supply of gas to storage facilities have been allowed on pipelines under the supervision of that company. Thus, in the case of increased interest in supplies via this route, the JAGAL’s priority will be to provide the raw material to the storage facility in Peissen. In 2017, the power of gas injectivity to Katharina will be 26 mln m3 of natural gas per day. Meanwhile, the capacity of the physical reverse flow service from Germany to Poland is 620,000 m3 per hour, i.e. 14.88 mln m3 per day. This means that if Gazprom Germania wanted to inject gas to Katharina, the possibility to bring gas from Germany to Poland would be blocked. As a consequence, the physical reverse flow service would cease to provide the Poles power on a firm basis. This term means supplies at the customer’s request at any time. In fact, the German reverse flow service would already operate on an interruptible basis, that is not guaranteeing safety. One day the Poles could ask for gas and not get it, because Gascade would be just in the middle of injecting gas to the storage facility. The injectivity usually takes place during the summer, but let us keep in mind that the storage facility referred to above is cavern, which allows to start pumping with “one button”. Someone could use it during the heating season to test the nerves of the Poles. Someone could spin conspiracy theories that these technical problems of Nord Stream and Mallnow recurring for two years were a test of a plan to cause sudden interruption of supplies from Germany to Poland.

This would mean that the Poles’ assumptions regarding the safety of gas supplies fell apart. The gas connections in Lasów (1.5 bln m3 per year) and Cieszyn (0.5 bln m3), as well as the German reverse flow service (5.4 bln m3), theoretically, give Poland the possible to bring 75 percent of the demand (about 10 bln m3) without regard for Gazprom. 5 bln m3 from the LNG terminal in Świnoujście was to make us one hundred percent independent in the future. Without Mallnow, the ability to diversify will drop to 20 percent. When the LNG terminal is finally ready, the potential will rise to 70 percent. Even if the expansion of the terminal is completed by the third tank, this indicator will reach 90 percent. The Poles will not be independent from gas supplies from Russia.

The creators of the Katharina storage facility do not hide that it has been named in honour of Catherine II, Tsarina of Russia, who was born Germanic princess of the Saxon Anhalt. In this way, the ruler associated with the great misfortune of Polish history – with partitions – provides patronage for the next Russian-German plan, which might endanger the safety of our country.


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