Baltic Pipe – positive result of economic tests

Overview of the five components of the Baltic Pipe. Route and compressor station location are indicative, and not specific. Image: CEEP
Overview of the five components of the Baltic Pipe. Route and compressor station location are indicative, and not specific. Image: CEEP

After the evaluation of the Open Season Phase 2 Bids and the final allocation result, GAZ-SYSTEM and Energinet were obliged by the respective national regulatory authorities  to assess the economic viability of the Baltic Pipe project.

Both operators achieved a positive result of the Economic Test, which means that the Capacity Agreements under the 2017 Open Season should be concluded by the end of January 2018 at the latest.

Capacity allocated as a result of the Open Season Procedure completed on 31 October 2017 confirmed the business rationale for the construction of the new transmission infrastructure to enable gas transmission from Norway through Denmark to Poland, and from Poland to Denmark.

At the moment both operators will continue their project activities in order to be able to deliver first gas in October 2022 if a positive investment decision is taken in 2018. The final investment decision to be taken in 2018 depends, among other things, on the fulfilment of the conditions precedent set out in the Capacity Agreements.

The Baltic Pipe is a major gas infrastructure project that aims at creating a new supply corridor for gas in the European gas market; the projected pipeline makes possible for shippers to flow gas directly from Norway to Denmark, Poland and other neighbouring markets.

The pipeline will be approximately 600-800 kilometres long and is projected to start its gas transmission services by the end of 2022. The new pipeline would expand Europe’s gas transmission capacity by up to 10 billion cubic metres of gas per year.

Meanwhile the EU has included the Baltic Pipe on its list of key infrastructure projects – Projects of Common Interest (PCI).

On 24 November 2017, the European Commission published the third European list of projects in the natural gas sector that were granted the status of PCIs. Except the Baltic Pipe, among the investment projects undertaken by GAZ-SYSTEM SA there have been also extension of LNG terminal in Świnoujście included in the list.

The PCI status confirms that GAZ-SYSTEM projects constitute key elements of energy security policy that is under implementation by the Polish government, and are in line with EU energy policy.

Source: GAZ-SYSTEM, Energinet, CEEP

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