Poland’s state oil and gas producer PGNiG has sealed a major gas delivery contract with Danish offshore wind developer Orsted in a bid to diversify its supply sources.
Germany-based international trading arm PGNiG Supply & Trading has contracted to buy about 6.4 billion cubic metres of gas (70 terawatt hours) from Orsted with delivery between 1 January 2023 to 1 October 2028.
Gas is expected to flow directly from Denmark to Poland via the Baltic Pipe, a joint project between the gas transmission operators of the two countries, Poland’s Gaz-System and Denmark’s Energinet.
The Baltic Pipe will be able to transport up to 10 Bcm per annum of gas from Norway and Denmark to Poland and is now expected to come into operation by October 2022.
Last week, Energinet said that the laying of pipes on the Danish island of Zealand will take longer than originally planned.
“To avoid serious damage on the ground, works on some sections should not be completed until the summer of next year”, Energinet said.
The start of construction of the pipeline on the Danish side was already pushed back earlier this year because of the impact from Covid-19 pandemic on the logistics of the project.
However, Gaz-System said that it expects no delay in construction on the Polish side, with a group of contractors, Germany’s Max Streicher and Poland’s Atrem, Budimex and JT SA, selected this month for building compressor stations and onshore pipeline segments.
PGNiG said that because Denmark is linked to Germany via the pipeline interconnector at Ellund, it will still be able to receive gas from Orsted in the event the construction of the Baltic Pipe sees another delay.
The Polish company added that Orsted expects to source some gas from the Tyra offshore gas field near Denmark, besides open market purchases.
Gas production from Tyra was halted last year, with processing and accommodation topsides and flare jackets removed from the platform for re-cycling to free space for a re-development project, expected to extend its operational life by at least 25 years.
Poland already operates an LNG import terminal in the Baltic port of Swinoujscie, with Gaz-System evaluating commercial viability of building a second LNG re-gasification import facility in the port of Gdansk.