State of Play of Gas Interconnection Poland Lithuania (GIPL)

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1 State of Play of Gas Interconnection Poland Lithuania (GIPL) Status Quo & Further Steps Baltic Gas Market Forum Tallinn, 3 rd November

2 GIPL: original approach The main goals Integrate the isolated gas markets of the Baltic States and Finland into a single EU gas market, Diversify gas supply sources, routes and counterparties, Increase security and reliability of gas supplies, Bi-directional capacities PL LT: 2.4 bcm/y, LT PL: 1.7 bcm/y, Capacities might be enhanced substantially, if constructing additional compressor stations. 2 Infrastructure More than 500 km pipeline (DN 700): 357 km on PL side and 177 km on LT side Expansion and development of Compressor s capacities in PL CAPEX Expected originally planned CAPEX : EUR 558 million EUR 136 million on LT side, EUR 422 million on PL side (subject for review), Substantial external financing: More than EUR 300 million of EU co-financing from CEF via 2 grants, Part of investment in PL will be covered by crossborder cost allocation (CBCA) payments from Baltic States (up to EUR 85.8 million). Commissioning year 2019

3 GIPL PROJECT NEW TECHNICAL APPROACH ON POLISH SIDE Project s technical capacity - overview Due to new technical approach on Polish side, number of technical (hydraulic) analysis were prepared for identification changes of potential capacity level, comparing to previous approach. In this terms, some differences were indicated concerning on LT-PL flow direction. For PL-LT flow direction, level of capacity remains unchangeable (2.4 bcm/y, 275 tcm/h), taking into account using existing infrastructure on CS Hołowczyce For LT-PL flow direction, level of capacity could increase - taking into account i.a. shorter section of GIPL pipeline on PL side, comparing to previous technical approach GIPL pipeline (PL side) General technical parameters Previous approach DN700 MOP 8,4 MPa Start Point: CS Rembelszczyzna New approach DN700 MOP 8,4 MPa Start Point: CS Hołowczyce 3

4 GIPL PROJECT NEW TECHNICAL APPROACH ON POLISH SIDE Polish Transmission System Operation today The flow scenario which includes gas supplies from east is presented in the figure. As it may be observed gas supplies from east constitutes important role in system operation. The entry points to system in analysed case are: Eastern direction Belarus Ukraine SGT LNG Terminal in Świnoujście Czech Republic Germany (Lasów) (Mallnow) 4

5 GIPL PROJECT NEW TECHNICAL APPROACH ON POLISH SIDE Polish Transmission System Operation new Corporate Strategy According to the new Corporate Strategy of GAZ-SYSTEM towards 2025 the gas transmission system in Poland will be able to be operated without gas supplies from eastern direction. The new entry capacities located in Northern Poland will be sufficient to supply the system. The scenario assumes gas supplies from: LNG Terminal in Świnoujście Baltic Pipe Czech Republic Germany: (Lasów) (Mallnow) 5

6 GIPL: Multiple Benefits for the Region Integration of gas markets of the Baltic States and Finland into a common EU gas market Diversification access to alternative gas supply sources, routes, counterparties and increase of competition Increase of security of gas supply both in terms of additional interconnection capacity and possibility to apply solidarity measures between Member States Benefiting the use of LNG terminals enabling more flexible and efficient use of LNG infrastructure in Poland and Lithuania Enhancing liquidity both in Polish and Baltic gas hubs and strengthening their regional role 6

7 GIPL implementation: current status In Lithuania: Preparatory works (EIA, land use planning, engineering) fully accomplished Construction permissions have been obtained in Aug-Sept 2016 In Poland: Works on Environmental Inventory and natural valuation are completed (for old route) Decision taken that current contractor will obtain environmental decision for the whole old route and for the section, which is assumed as common for the old and new GIPL route, it will complete the full scope of engineering works, incl. obtaining building permit works are ongoing Variants of the new GIPL route determined based on on-site evaluation for purpose of technical feasibility study. Scope of the technical feasibility study and environmental inventory and natural valuation was elaborated and agreement with a contractor is about to be signed (no public procurement rules applied) Common Actions: Joint amendment request of the Grant Agreements to INEA Nov

8 GIPL: following steps in 2017 Signing of Inter-TSOs Agreement between Baltic and Poland TSOs on CBCA compensations Signing of Connection Agreement by Project Promoters Launch of tenders for pipe purchase & construction works on Lithuanian side Completion of technical feasibility study regarding the new technical approach on Poland side 8

9 Thank you. Questions?