Gazprom offers muffled reassurance
"According to our information, the Polish economy didn't record any losses due to the halting of gas supplies," said Medvedev, speaking from Moscow at a teleconference in Warsaw last week. "We don't see any basis to pay compensation."
Perhaps the most concrete outcome of last month's Belorussian gas crisis (in which Russian supply was temporarily cut, causing disruption in this country) was a media frenzy in which the debate about Poland's energy security reached every household.
Medvedev tried to play down the severity of the crisis by adding that, "the situation with supplies to Poland was not catastrophic at all."
With 90 percent of Poland's natural gas imports coming from Russia, the public may have been looking for a far more symbolic reassurance than Medvedev was prepared to give. The public is clamoring for a change in Poland's energy security situation, and politicians are feeling the heat.
A number of solutions have been mooted, including new supply arrangements with the European pipeline network, the construction of a new supply line from Norway, and the acceleration of domestic exploration and production.
Greater diversification of supply is also planned with the completion of two pipelines from the gas-rich region of Yamal in Siberia to Poland and on to Western Europe. "Gazprom will finish the first line of the Yamal-Europe gas pipeline by mid-2005," said Gazprom Deputy CEO Alexander Ryazanov, "However, the decision on the second parallel line will be taken in five to six years."
The Yamal pipeline's first stretch was opened in 1999. The second section, which will raise the total capacity of the lines to at least 65 billion cubic meters, has been dogged by finance plans for necessary gas compressors.
A pipeline directly from Russia to Germany has been planned to by-pass third parties such as Poland and Belarus. The zł.15.8 billion ($4 billion) project has been approved by Gazprom authorities.
Gazprom's strategy is to wait for European demand to grow before investing in the second branch. But the company expects further short-term increases in income from gas exports above and beyond last year's record levels.
In 2004, Gazprom is expecting the sale of gas to European countries to increase to 153 billion cubic meters, from 104.5 billion cubic meters last year. This is presented as an opportunity for the Polish gas industry, which will act as a conduit for the Eurasian fuel transport.
Despite his pessimism about a compensation arrangement, Medvedev indicates that Gazprom will be open to discussion at this week's meeting in Warsaw between officials of the state-owned Polish Oil and Gas Company (POGC) and their Russian counterparts.
"If we receive other information about [the effect of the crisis on the Polish economy] then we are ready to consider it, based on contract details," Medvedev said.
Norway is also still pushing to offer Poland an alternative supply to Russian gas, and officials deny that depletion of reserves will be an issue in the near future. "Given the level of proven resources, and measures to enhance recovery, the present level of gas production can be maintained for nearly 100 years," says Sten Lundbo, Norwegian ambassador to Poland. "In other words, gas will play an increasingly important role in Norwegian petroleum activities."
The Polish Oil and Gas Company's long-term goal is to establish Poland as a major hub of storage and gas inter-connection. According to their strategy, major sources of gas flowing into Europe, largely originating from Russia, Norway and Algeria, would be able to flow through Poland in any direction.
This requires a choice of inter-connections to avoid the kind of disruption seen last month. "The Board of POGC would like to stress that ... connections are to operate as inter-connectors, i.e. will be designed for two-way gas transmission," reads a statement from the POGC. "This will enable POGC to import gas from other players besides the Russian suppliers, as well as to export gas from Poland to other countries."
According to the Council of Ministers Decree of October 24, 2000 concerning the diversification of supply, and a government document entitled "Amended Energy Policy Guidelines to 2020", the POGC is obliged to enhance diversification of sources of gas supply.
"Domestic production is an important element of supply diversification," says the POGC. "According to the program adopted by the Board, it will increase by 50 percent (to exceed 6 billion cubic meters) by 2006. The current domestic production is 4.3 billion cubic meters."
Perhaps the most concrete outcome of last month's Belorussian gas crisis (in which Russian supply was temporarily cut, causing disruption in this country) was a media frenzy in which the debate about Poland's energy security reached every household.
Medvedev tried to play down the severity of the crisis by adding that, "the situation with supplies to Poland was not catastrophic at all."
With 90 percent of Poland's natural gas imports coming from Russia, the public may have been looking for a far more symbolic reassurance than Medvedev was prepared to give. The public is clamoring for a change in Poland's energy security situation, and politicians are feeling the heat.
A number of solutions have been mooted, including new supply arrangements with the European pipeline network, the construction of a new supply line from Norway, and the acceleration of domestic exploration and production.
Greater diversification of supply is also planned with the completion of two pipelines from the gas-rich region of Yamal in Siberia to Poland and on to Western Europe. "Gazprom will finish the first line of the Yamal-Europe gas pipeline by mid-2005," said Gazprom Deputy CEO Alexander Ryazanov, "However, the decision on the second parallel line will be taken in five to six years."
The Yamal pipeline's first stretch was opened in 1999. The second section, which will raise the total capacity of the lines to at least 65 billion cubic meters, has been dogged by finance plans for necessary gas compressors.
A pipeline directly from Russia to Germany has been planned to by-pass third parties such as Poland and Belarus. The zł.15.8 billion ($4 billion) project has been approved by Gazprom authorities.
Gazprom's strategy is to wait for European demand to grow before investing in the second branch. But the company expects further short-term increases in income from gas exports above and beyond last year's record levels.
In 2004, Gazprom is expecting the sale of gas to European countries to increase to 153 billion cubic meters, from 104.5 billion cubic meters last year. This is presented as an opportunity for the Polish gas industry, which will act as a conduit for the Eurasian fuel transport.
Despite his pessimism about a compensation arrangement, Medvedev indicates that Gazprom will be open to discussion at this week's meeting in Warsaw between officials of the state-owned Polish Oil and Gas Company (POGC) and their Russian counterparts.
"If we receive other information about [the effect of the crisis on the Polish economy] then we are ready to consider it, based on contract details," Medvedev said.
Norway is also still pushing to offer Poland an alternative supply to Russian gas, and officials deny that depletion of reserves will be an issue in the near future. "Given the level of proven resources, and measures to enhance recovery, the present level of gas production can be maintained for nearly 100 years," says Sten Lundbo, Norwegian ambassador to Poland. "In other words, gas will play an increasingly important role in Norwegian petroleum activities."
The Polish Oil and Gas Company's long-term goal is to establish Poland as a major hub of storage and gas inter-connection. According to their strategy, major sources of gas flowing into Europe, largely originating from Russia, Norway and Algeria, would be able to flow through Poland in any direction.
This requires a choice of inter-connections to avoid the kind of disruption seen last month. "The Board of POGC would like to stress that ... connections are to operate as inter-connectors, i.e. will be designed for two-way gas transmission," reads a statement from the POGC. "This will enable POGC to import gas from other players besides the Russian suppliers, as well as to export gas from Poland to other countries."
According to the Council of Ministers Decree of October 24, 2000 concerning the diversification of supply, and a government document entitled "Amended Energy Policy Guidelines to 2020", the POGC is obliged to enhance diversification of sources of gas supply.
"Domestic production is an important element of supply diversification," says the POGC. "According to the program adopted by the Board, it will increase by 50 percent (to exceed 6 billion cubic meters) by 2006. The current domestic production is 4.3 billion cubic meters."
