Denmark And Poland Sign Gas Supply Deal

The Polish government signed a long-term gas supply deal with Denmark, which it hopes will diversify imports away from Russia and pave the way for the larger gas accord Poland wants to sign with Norway.

The Polish and Danish state gas monopolies PGNiG and DONG agreed to an eight-year deal which will bring Poland two billion cubic meters of North Sea gas annually and a related 143 mile underwater pipeline project.

The 300-million-euro-plus BalticPipe route, with an annual capacity of eight bcm will connect southeastern Denmark with Poland's market of 39 million consumers - the largest economy in central Europe.

The pipeline, to be built by a consortium of PGNiG (Polskie Gornictwo Naftowe i Gazownictwo) and DONG by late 2003.

Poland consumed 10.9 billion cubic meters of natural gas last year, with imports from Russia covering around 70 percent of domestic demand. Poland, which this October will start receiving annually 500 million cubic metres of Norwegian gas at its border with Germany, wants to secure ten times more supplies from Norway's Statoil via an underwater pipeline.

Norway, which so far has not declared its intention to participate in the BalticPipe project, has until March 2002 to decide whether to co-finance the project, which could also be used to pump Norwegian gas into Poland.