Poland buys Norwegian gas 

August 29, 2001, 20:30 CEST

The state-owned Polish Oil & Gas Company (POGC) and Norway's Gas Negotiating Committee (GFU) have agreed on the terms concerning long-term deliveries of Norwegian gas. The agreeement entails deliveries of 74 billion cubic metres of gas over a 16-year period.

The agreement, which is expected to be signed very soon, requires approval by the authorities.

If the total volumes are not sufficient to realise the proposed transport solutions for gas to Poland, the Norwegian companies which will supply the gas, can withdraw from the agreement.

Due to start in 2008, these deliveries are scheduled to build up over three years to a plateau of five billion cubic metres per annum until 2024.

The deal has been negotiated by the GFU with the participation of Statoil, Norsk Hydro, Norske Shell, ExxonMobil and TotalFinaElf. Which fields will deliver the gas is to be decided later.

"This is a breakthrough for Norwegian gas deliveries to Poland. It is a good agreeement, similar to other agreements in Statoil's portfolio," says Thor Otto Lohne, vice president for marketing in Statoil's Natural Gas business area.

The contract replaces a small agreement covering 500 million cubic metres per annum from 2000 to 2006 negotiated by the POGC and the GFU last year.

The Poles consumed 11.1 billion cubic metres of natural gas in 2000, with Russia accounting for 6.9 billion cubic metres of this total.
Deliveries under the new contract will require the creation of an export solution from Norway to Poland.

One option is to lay a 1 100-kilometre submarine pipeline through the Skagerrak channel between Norway and Denmark, and tying this to the Polish gas network at Niechorze on the Baltic coast.

Such a line could also supply other markets, including Norway’s Grenland industrial region south of Oslo and Sweden. In the rather longer term, Denmark could also be supplied via this system.