Gas pipeline links ČR, Poland

The taps are on for the first joint high-pressure gas pipeline between the Czech Republic and Poland, a development politicians on both sides of the border say will boost capacity and increase energy security.

The pipeline, which was inaugurated Sept. 14 by Czech Prime Minister Petr Nečas and his Polish counterpart, Donald Tusk, will eventually connect all four countries of the Visegrad Group and Croatia from the Adriatic to the Baltic Sea. This latest border-straddling 32-kilometer section of pipeline, dubbed "Stork," will be the conduit for liquefied gas from terminals in the Polish city of Świnoujście in the north as well as from terminals in the Croatian city of Krk in the south.

"This creates a basis for the so-called North-South gas corridor, a European project that will in the future enable the Czech Republic to connect to new routes that will run through Southeast Europe," Nečas said.

The 22 kilometers of pipeline on the Polish side were built by operator Gaz-System, and the remaining Czech share of the project was constructed by the Net4Gas company, the sole holder of gas-transit rights in the Czech Republic and operator of the existing backbone gas infrastructure.

The cost of construction for the Stork segment was 28 million euros (694.7 million Kč), half of which was paid for by the European Commission's European Energy Programme for Recovery. Support for the project gained momentum after the 2009 gas crisis, when 18 European countries saw their gas supplies transiting through Ukraine from Russia either drop or cut off completely as the two countries disputed Ukraine's gas debt.

"Construction of the pipeline contributes to the needed transmission capacity increase, but it is also of strategic importance from the energy security and energy source diversification point of view," said Net4Gas CEO Thomas Keefuss.

While the addition of the Stork pipeline is an important step toward the interconnectivity of regional gas supplies, Jakub Skavron, an energy analyst with Roland Berger Strategy Consultants, said the fact of Czech dependence on Russian gas, at least for the time being, is inescapable.

According to the most recent figures from the Office for Economic Cooperation and Development, the Czech Republic imported 9,683 million cubic meters of gas in 2009, nearly 70 percent of which came from Russia. Norway was the second-largest supplier of gas to the country.

"To call a pipeline with capacity of 0.3 percent of Russian gas supplies or 2 percent of Czech and Polish annual gas demand an a important step toward Russian gas independence is a little bit exaggerated," Skavron said. "The commission of the Nabucco pipeline will be an important step - definitely not this interconnection."

The Nabucco pipeline is hailed by the consortium constructing it (of which Net4Gas parent company RWE is a member) as the "gas bridge" between Asia and Europe that can circumvent Russia altogether. The EU-backed Nabucco project that would bring gas from the Caspian region to Europe through Turkey has suffered numerous political and logistical setbacks in recent years.

After months of apparent stagnation with the project, the European Commission announced the start of negotiations with key supplier countries Azerbaijan and Turkmenistan on behalf of the Nabucco project in early September.

While Skavron said in the grand scheme of European gas supplies the Stork pipeline is small, more such interconnections with higher capacity are needed in order to develop real price competition in Europe and to eventually create a secure network of supplies.

"But the capacity in place will only solve the first half of the problem," he said. "The second half is to bring gas from somewhere other than Russia. This could be solved by the Nabucco pipeline."

Emily Thompson can be reached at
ethompson@praguepost.com