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Poland throws down gas gauntlet to Russia

Poland on Friday received its first-ever commercial LNG delivery from the Middle East at its brand new Baltic sea terminal, a key step in easing its dependence on Russian gas.

Aside from shaking off the grip of Russia’s energy Goliath Gazprom, Poland also wants to use its first liquefied natural gas facility to propel itself into the position of a major player in the region’s gas market, experts say.

“In time, Poland has a chance to become a gateway for gas deliveries to Central Europe,” Jacek Cwiek-Karpowicz, energy expert of the PISM Polish Institute of Foreign Affairs told Agence France-Presse. “It’s also a way to show a bit of muscle, to show that we have alternatives.”

Poland now relies on Russia for about forty percent of its gas, with a third coming from domestic sources and 20 percent from central Asia.

But as tensions with Russia have flared since its 2014 annexation of the Crimean peninsula from Ukraine, Poland believes easing energy reliance on Moscow is more important than ever to shore up its national security.

Twice in the past decade cuts in gas supplies by Russia to Ukraine have hit transit to Europe, leading to severe shortages in certain countries.

The Swinoujscie terminal has an initial annual capacity of five billion cubic meters of natural gas, but this could soon grow to 7.5 billion cubic meters — or a whopping fifty percent of Poland’s current gas consumption.

Named after Poland’s late president Lech Kaczynski, who died in 2010 in a jet crash in Russia, the facility cost 720 million euros ($809 million).

In the pipeline

The facility is a key part of what Warsaw has variously dubbed its “Northern Gateway” or “Northern Corridor” plan to pump its LNG deliveries to keen Central European partners.

Chartered by Qatargas, the massive Al Nuaman LNG tanker arrived Friday at the Swinoujscie terminal with supplies for the PGNiG Polish state gas monopoly.

The new terminal is a “regional game-changer,” according to a report by the Center for European Policy Analysis (CEPA), a US think tank based in Warsaw and Washington.

Warsaw has also beefed up its natural gas delivery network, building hundreds of kilometers of pipelines and large underground reservoirs, as well as interconnections with neighboring countries.

Other ambitious projects are in the pipeline. Warsaw is mulling second LNG terminal near the northern port city of Gdansk.

It would be a floating facility, similar to one neighboring Lithuania opened in 2014 that has ended the Baltic state’s total dependence on Russian gas.

Another idea is to build a pipeline linking Poland to Denmark which would allow Warsaw to receive gas from Norwegian fields. Warsaw and Copenhagen relaunched the Baltic Pipe project in April.

Eventually, Poland wants to use its Northern Gateway to import up to 18 billion cubic meters of gas, half of which would be exported to other Central European countries.

The Polish plans would also bypass the Nord Stream 1 and planned Nord Stream 2 pipelines pumping Russian gas under the Baltic to Germany, each with a capacity of 55 billion cubic meters.

Vladimir Putin: ‘don’t care’

Late last month, Warsaw showed Moscow it meant business.

Piotr Naimski, in charge of Poland’s energy infrastructure, said: “I don’t think we’ll extend our long-term Yamal gas contract after 2022.”

He was referring to gas deliveries Poland receives from Gazprom’s massive pipeline pumping gas from Siberia via Poland to Germany.

“We’ll look for other solutions and contracts,” he said, adding that the price Poland paid for Russian gas was the highest in Europe.

The announcement did not go unnoticed by Russian President Vladimir Putin.

“We don’t care. Either way the gas will find a buyer. If not in Europe then we’ll turn to other markets,” he told reporters at the time in Moscow.

But Piotr Maciazek, an expert at the website, said “Naimski’s statement is meant to force Russia to reconsider its prices and put them at the level of the global market.”

“The LNG terminal and other initiatives in this field make for a counterbalance to Gazprom’s position in the region,” he told AFP. “Slovakia, the Czech Republic and Hungary currently have no alternative to Gazprom. Prague has already expressed its interest in future deliveries via Poland.”

Ukraine, which is also looking to escape Gazprom’s clutches, announced on Wednesday that next year it will begin building a pipeline to Poland with an initial capacity of five billion cubic meters that could eventually reach eight billion.

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