Baltic Pipe to link Poland, Denmark

A multimillion-euro grant will allow a new gas pipeline to be built

New gas pipeline will soon link Poland with Denmark and Norway after last Monday the European Commission signed a multimillion-euro grant that will allow the project to go ahead. The Baltic Pipe is seen as Warsaw's answer to the Russian-German Nord Stream 2. The project will get a €215m EU grant, which was agreed by the Member States in January. The value of the entire investment in the pipeline, to be completed in 2022, is €1.6bn, around half of which is to be supplied by the Polish side.

The signing ceremony at the European Commission's headquarters in Brussels on Monday was attended by Polish PM Mateusz Morawiecki and representatives from Poland's gas pipeline operator Gaz-System. Running between Poland and Denmark, the bi-directional offshore gas pipeline will link the North Sea, Denmark and the Baltic Sea, which will ultimately allow Poland to be supplied with 10 billion cubic meters worth of gas annually from Norway's deposits.

The EU hailed the new pipeline as “a key European energy infrastructure project with major cross-border benefits.” According to Morawiecki, the Baltic Pipe will boost the country's energy security, at a time when one of its closest neighbours, Germany, will become increasingly reliant on Russian gas through the controversial Nord Stream 2 pipeline, currently under construction. “The deal is a strategic breakthrough for Poland. Our energy security will look completely different. Baltic Pipe is a kind of a counterweight to Nord Stream 2, because it increases the diversification of energy supply for the EU,” he said.

In order to get the project proceed Poland and Denmark put aside long-standing and partly forgotten disputes. The countries signed an agreement last year on the demarcation of water boundaries south of the Danish island of Bornholm, where the pipeline is to be laid. The first grants from the EU budget for studies on the viability of the project were handed out in 2015, and last autumn, the heads of Polish and Danish gas pipeline companies signed a deal approving their own investments in the gas pipeline.

Monday's signing took place as the European Council approved an amendment to the EU's gas directive which will likely complicate and delay the construction of Nord Stream 2, which several Baltic and central European states oppose. Apart from Bulgaria, which abstained, all other Member States including Poland eventually approved the changes last month despite Brussels adding a special loophole to allow the project linking Russia and Germany to proceed. The amended directive does, however, give the Commission powers, to some extent quite discretionary ones, that could see Germany forced to prove that Nord Stream 2 is not hurting competition in the sector.

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