Energinet and GAZ-SYSTEM initiate Open Season for Baltic Pipe
According to an analysis, a Baltic Pipe connection from the Norwegian gas fields in the North Sea across Denmark and the Baltic Sea to Poland can benefit all parties. A bidding process aims to clarify whether this would be financially viable.
Energinet and polish GAZ SYSTEM are initiating Open Season for a possible future gas pipeline from the Norwegian gas fields in the North Sea to Poland via Denmark.
Open Season is a bidding process that allows companies in the gas market to bid on and acquire capacity in Baltic Pipe. The bids are binding, and will determine whether there is enough demand for transporting Gas back and forth to make construction of the connection viable
The decision has been approved by the Energinet Board.
- The project must be financially viable. We need to have certainty about the investment. “The Baltic Pipe project can only be realised if companies in the gas market in the Open Season procedure undertake to buy sufficient pipe capacity during the first 15 years of the connection,” says Kim Andersen, Chairman of the Supervisory Board of Energinet.
Study: A good idea
Energinet and Polish gas transmission system operator GAZ-SYSTEM S.A. conducted a feasibility study in 2016. The results show that the Baltic Pipe connection can be of socioeconomic benefit to both Denmark and Poland.
In Denmark, the connection will be able to ensure low, stable gas tariffs in the years ahead. At a time when Danish gas consumption is generally declining, and there are fewer and fewer consumers to cover the costs of operating and maintaining the gas grid, Baltic Pipe could triple the gas flow in Danish pipes, resulting in stable or declining consumer tariffs.
In Poland, Baltic Pipe will increase competition in the gas market, benefiting consumers.
Multiple supply routes
Furthermore, Baltic Pipe will provide more supply routes and thereby greater security of supply – not only in Denmark and Poland, but potentially also in Sweden, which receives all its gas through Denmark, as well as in other Eastern European countries and the Baltic states.
- For the first time, a Baltic Pipe connection can directly connect the gas in the North Sea with consumers in Eastern Europe, at the same time as turning Denmark into an important hub. Cross-border connections are important to competition and Europe’s future energy supply, and all three countries may benefit from Baltic Pipe, says Kim Andersen, while also emphasising that the future of the project will not be determined until the results of the Open Season procedure are available.
What will be built if the project goes ahead?
If the Baltic Pipe project goes ahead, a new pipeline needs to be built, interconnecting the existing Norwegian pipes in the North Sea with the existing Danish pipe network on the Danish west coast. As gas volumes will increase significantly, another pipeline needs to be built across Little Belt and Funen from the Egtved gas node. The gas can then flow in the existing pipes under Great Belt. A new gas pipeline must also be built in Southern Zealand, and a pipe must be laid in the Baltic Sea to Poland.
Onshore, the pipeline will be buried more than one metre underground, while offshore pipes will be laid in the seabed so they are protected.
There will also be a need for a large compressor station, probably in Southern Zealand, to ensure that the large gas volumes are put under pressure and transported through the pipe system.
It has not yet been decided where the pipeline and compressor station can be located.
In 2013, Energinet.dk built a similar pipeline from Egtved to the Danish-German border.
Landowners and local population to be involved
Energinet will now contact local authorities and other authorities to engage in initial discussions on where a possible gas pipeline can be placed underground.
If the decision is made to construct Baltic Pipe, landowners and local populations will also be contacted and involved.