PGNiG casts doubts on plan for alternative gas pipeline to Baltic Pipe

Inter-regional gas distribution company VNG, which is owned by Ruhrgas, is planning the construction of a new gas pipeline in competition with Baltic Pipe, in which Poland has a key interest. Baltic Gas Interconnector will link Rostok in eastern Germany with southern Scandinavia. Other companies said to be involved in the project are Norsk Hydro of Norway, Sydkraft of Sweden, and SK Power of Denmark. The European Union (EU) has promised to contribute euro 5 million toward the total estimated cost of $250 million. Commenting on the plan, chairman of Polish Oil and Gas (PGNiG) Andrzej Lipko said, "Our analysis suggests that the economic presumptions are missing for the construction of this pipeline. The Swedish market does not have the development potential for that much gas." In June PGNiG concluded a contract with Denmark for gas supplies through the Baltic Pipe, starting in 2004. Then last month it signed a deal with Norway for the purchase of 74 billion cubic meters of gas over 16 years. (Rzeczpospolita, p. B2) M.T.