Natural Gas Starts Flowing Through New Baltic Pipe Project

Natural gas began flowing in full capacity Wednesday on a new pipeline, the Baltic Pipe, running from Norway through Denmark and Poland after a three-year construction project.

The pipeline-a joint project between Danish Energinet and Polish gas transmission system operator GAZ-SYSTEM- is now fully operational with a capacity of 350 billion cubic feet (10 billion cubic meters) per year, adding another layer of energy security to Europe to counteract Russia's weaponization of gas.

"It's a huge day for us in Europe. After a very intense process, we have reached the target and can open the valves on Baltic Pipe," Torben Brabo, Director of International Relations for Energinet, said in a press release.

"The war in Ukraine and the resulting energy crisis have - unfortunately - underlined the importance of this project. By constructing the new gas pipeline, we are helping to fulfill Poland's wish to become independent of Russian gas. Baltic Pipe also helps Poland transform its energy system from coal to natural gas, which is an important stepping stone on the road towards much more renewable energy," Brabo said.

According to Energinet, the pipeline will strengthen "security of supply in Poland and the countries connected to Poland by gas pipelines".

As far as capacity, around 80% of the pipeline's capacity is already booked for the next 15 years but countries can bid on the remaining capacity of gas from Norway.

As of the beginning of this year, the European Union was relying on Russia for some 40% of its natural gas supplies. That reliance has been significantly reduced since Russia launched its invasion of Ukraine in late February. American LNG has played a key role in reducing that reliance, though at a higher cost for Europe.

Reliance on Russian LNG, however, still remains heavy. According to Rystad Energy, shipments of Russian LNG in the year to September totalled 1.2 million tonnes. Russia is said to supply around 15% of Europe's LNG. The shift to more Russian LNG gained momentum after Russia cut piped gas shipments from Nord Stream 1 earlier this year.

By Charles Kennedy for Oilprice.com

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