Gas wars on the horizon
Aljosa Milenkovic

The European Union has approved a massive financial aid package for Poland to construct a gas pipeline from Denmark. The 250-million-U.S.dollar deal will help Poland build the 900-kilometer long Baltic Pipe project. It's aimed at freeing the country from its dependence on Russian supplies. But the project's viability could depend on Russian cooperation.

However, big deals and big politics mean almost nothing to ordinary Poles, like Filip, a swimming instructor who lives with his girlfriend in a rented apartment in the suburbs of Polish capital Warsaw. They use natural gas for heating and cooking. Filip likes to cook and prefers gas cookers to standard electrical stoves.

"We use gas for cooking, and heating of our apartment. Recently, we received our gas bill and it was about 100 U.S. dollars for a period of three months," said Filip, adding that "I don't know if that's a lot or little because I don't really have a comparison with other heating sources, but I'm afraid that gas prices will go up."

Filip making tea at his apartment in Warsaw, Poland, February 9, 2019. /CGTN Photo

Filip making tea at his apartment in Warsaw, Poland, February 9, 2019. /CGTN Photo

Filip's fear is not without reason, as a possible trade war between Russia and the West over gas supplies could erupt and lead to price hikes. A trade war can start at the Baltic Sea.

Baltic Sea: Economic warzone

Its seabed is criss-crossed with dozens of telecommunication cables and a web of pipelines. The Nord Stream is one of those. It brings natural gas from Russia directly to Germany, bypassing all the countries in between, namely Ukraine and eastern EU countries.

Now, Russia and Germany are building the Nord Stream 2, a new pipeline which is going to render any remaining gas transits over Ukraine, unnecessary, hence depriving that country of almost three billion U.S. dollars in annual transit tax. That's a scenario which Ukraine, the U.S. and Poland are trying to prevent. 

Poland is Europe's strongest advocate against the construction of the Nord Stream 2, claiming that Russian natural gas is going to be used as a political pressure tool. That's why Poland decided to cut its remaining dependency on Russian natural gas and embark on the Baltic Pipe project, despite Russia's proven record of over 50 years as a reliable gas supplier.

Bartłomiej Derski, an energy market analyst, during an interview with CGTN in Warsaw, Poland, February 12, 2019. /CGTN Photo

Bartłomiej Derski, an energy market analyst, during an interview with CGTN in Warsaw, Poland, February 12, 2019. /CGTN Photo

According to Bartłomiej Derski, an energy market analyst at the WysokieNapięcie.pl website, it is not just the economy that propels this Baltic Pipe project forward.

"This is a project that is partly commercial and partly political. Poland has decided it does not want to import natural gas from Russia regardless of market conditions, so the only alternative reached by the government is, at this moment, the import of natural gas from Norway via Denmark," said Derski.

And while some are questioning the financial viability of the project, others doubt the possibility of the pipeline reaching Poland, as it has to cross over the Nord Stream and Nord Stream 2 pipelines, controlled by Russia's Gazprom. For that Poland needs approval from Russians, whose gas this Baltic Pipe aims to replace.

Wojciech Jakóbik, an energy market expert, during an interview with CGTN in Warsaw, Poland, February 11, 2019. /CGTN Photo

Wojciech Jakóbik, an energy market expert, during an interview with CGTN in Warsaw, Poland, February 11, 2019. /CGTN Photo

Wojciech Jakóbik, an energy market expert, thinks that Russians will issue that approval.

"That should proceed without a problem in the case of the Baltic Pipe because if any problems emerge then there would be problems with other connections that the Nord Stream 2 will require from Poland," said Jakobik.

The Nord Stream 2 is expected to be completed by the end of 2019, while the Polish-Baltic Pipe should be finished by late 2022.

(Cover: The pipelay vessel Pioneering Spirit starts the pipe laying operation for the Nord Stream 2 pipeline in the Gulf of Helsinki, Finland, December 23, 2018. /VCG Photo)