Companies lock horns over proposed gas pipeline
Disputes have occurred over the estimated costs of a gas pipeline project that would replace Russia with Norway as the main supplier of Poland's gas.
Bartimpex, a foreign trade company owned by tycoon Aleksander Gudzowaty and a gas importer, wants to build a pipeline from Bernau, Germany, to Szczecin, together with Germany's Ruhrgas. But the state-owned Polish Oil and Gas Co., Poland's monopolist gas importer, will not approve the project because the gas source is Russian.
Bartimpex claims the pipeline would only cost about $100 million compared with $2 billion-$3 billion for the Norwegian project and would hook Poland into pan-European gas supplies. Government sources, however, have expressed doubts because a substantial portion of Germany's gas also comes from Russia.
"Certainly Bartimex is trying to maintain its dominant position in Poland," said Michal Mierzwa, an analyst at CA IB Securities. "Their interest is to (control) the gas supplies at a very high level."
Bartimex was not available for comment.
Although keen on the German project, Poland does not want to risk giving the impression it is not serious about the project with Norway.
To offset building costs, Norway's Statoil wants assurances that at least 10 billion cubic meters of gas will move through the pipeline annually. For that reason, Poland, which only wants an initial 5 billion cubic meters per year, is looking for partners to take the rest. Ukraine has indicated a possible interest.
Aside from project costs, gas from Russia is thought to be the cheapest available, which is why most of Europe is buying it. But gas companies will not discuss gas pricing beyond saying it fluctuates with crude oil prices and is usually set per long-term contracts.
Bidzina Bejuashvili, an analyst with Raiffeisen Capital & Investment in Moscow, said his firm has calculated what Hungary paid Russian monopolist Gazprom in the second quarter of this year: about $96 for every 1,000 cubic meters. In the same period of 1999, he said, Hungary was paying about $69 for 1,000 cubic meters.
Poland's contract likely sets similar prices and possibly minimum quantities, Bejuashvili said. Gas from Norway would be more expensive by 10-15%, he said.
But Wenche Skorge, Statoil's spokeswoman, said the market sets similar rates for all European gas. She said the Norwegian line would cost billions and construction could take years.
"A new pipeline will entail very big investment and that, of course, complicates talks because the project will have to be profitable," she said.
Poland already signed an agreement with Norway in 1998, through which 500 million cubic meters of Norwegian gas are being delivered through Poland's southwestern facilities in Zgorzelec for the next five years.
Although Poland consumes more than 11 billion cubic meters of gas annually, the country's demand is expected to reach 22 billion cubic meters in 2010. Currently, 7 billion cubic meters are purchased from Russia each year.
Of the 130 billion cubic meters of gas Russia exported in 1999, Bejuashvili said, Poland ranked eighth among European importers, taking 3%. The leading importers of Russian gas were Germany, Italy and France, taking 16.8%, 9.75% and 6.32% of the total exports, respectively.
