We Advised on the Strategic Baltic Pipe Energy Project
The Baltic Pipe is the first ever offshore gas pipeline connecting Poland with the European energy system, officially opened and symbolically launched on 27 September 2022.
This is the first such large-scale project in the Polish area of the Baltic Sea.
A new European gas pipeline
The Baltic Pipe is of strategic importance for Poland’s energy security, as it has enabled the creating of a new gas supply corridor in Europe.
It allows gas to be transported from Norway to the Danish and Polish markets, and also to end-users in neighbouring countries.
The pipeline also enables the transmission of gas from Poland to Denmark. The investment is being carried out by the Polish gas transmission pipeline operator Gaz-System in cooperation with the Danish operator Energinet.
A pillar of energy security in our part of Europe
The project consisted in the construction of an offshore gas pipeline connecting Poland and Denmark, to ensure stable gas supplies from the Norwegian shelf to Poland via Denmark after Poland terminated the Yamal contract for gas supplies from Russia.
The Baltic Pipe can transport up to 10 bcm of natural gas to Poland and up to 3 bcm of gas from Poland to Denmark annually. It will help increase the availability of gas on the Polish market and maintain competitive prices owing to the diversification of sources of supply.
“The gas pipeline crosses the territories of Poland, Sweden and Denmark and its development has been regulated by several jurisdictions. The project required complex analyses of the regulatory environment for offshore infrastructure projects, including resolving issues arising from the new offshore infrastructure crossing the existing one. We are delighted to have been able to contribute to its successful completion” – says Jacek Kozikowski, PhD, Partner, Head of the Infrastructure Practice.
An unprecedented undertaking and an innovative project
We were an advisor and partner in this strategic energy project.
“The project was unique and innovative in many respects, particularly because it was being jointly carried out by a Polish and a Danish operator, with the Polish company, Gaz-System, becoming the operator of the pipeline also outside Poland, i.e. of the Danish and Swedish sections. Another innovative aspect was Cross-Border Cost Allocation (CBCA) whereby the Polish transmission system operator partially financed the construction of a gas compressor station in Denmark and settled the costs in its future tariff, which required coordinated decisions on the part of the Polish Energy Regulatory Office (URE) and its Danish counterpart (FORSYNINGSTILSYNET). This is definitely an unprecedented undertaking in the European gas market, substantially changing the direction of gas supply from east to west” – adds Wojciech Wrochna, Partner, Head of the Energy, Natural Resources & Chemicals Practice.
Our remit included conducting regulatory analyses concerning the crossing of offshore gas pipelines, in particular with regard to international law, i.e. the United Nations Convention on the Law of the Sea, and the Act on Maritime Areas of the Republic of Poland and Maritime Administration.
We drafted the Construction Agreement and represented Gaz-System in negotiations with Energinet.
In addition, our Energy and Investment team was responsible for drafting heads of terms for the Pressure Service Agreement (PSA), the negotiations process and the model for services contracting.
“Energy transition is undoubtedly a major challenge facing not only Poland but the whole of Europe. However, this is a very complex process which will require the cooperation of many multidisciplinary teams with diverse legal and managerial expertise and skills. And I am confident to say that we at Kochański & Partners have exactly such a team, and such expertise and skills. That is why the energy industry is at the core of our business strategy. Our involvement in strategic projects in this sector such as the Baltic Pipe enables us to showcase our unique know-how, practical experience and skills in managing demanding cross-border projects and successfully sourcing financing for such ventures. Now we are a leader in the infrastructure and energy sector, have an appetite for more such projects and the potential for very dynamic growth“– says Piotr Kochański, Managing Partner.
The team of advisors comprised Wojciech Wrochna, Jacek Kozikowski, Aleksander Galos, Michał Będkowski-Kozioł and Milena Kazanowska-Kędzierska.
Read more in the interview by Wojciech Wrochna and Jacek Kozikowski, PhD for Rzeczpospolita.