The absence of Russian gas supplies revives Poland's profits and boosts the trend for clean energy - Energy

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The suspension of Russian gas supplies to Poland, at the end of last month, prompted an increase in the profits of the latter’s joint ventures with Norway, as well as a change of direction by dispensing with coal and other fossil fuel sources and promoting renewable and nuclear energy sources.

The Polish shift towards clean energy sources coincided with the European trend to gradually dispense with Russian energy supplies, especially since energy transformation plans require dispensing with fossil fuel supplies.

To show its ability to dispense with Russian gas, the Central European country announced that the profits of the National Gas Company would double during the first quarter of this year – especially the joint gas pipeline project with Norway – driven by the rise in oil and gas prices in global markets.

Promoting renewable and nuclear energy

Polish Prime Minister Mateusz Morawski stressed that despite his country’s heavy dependence on coal, it plans to dispense with Russian energy imports by promoting renewable and nuclear energy sources.

Russian gas supplies to Poland
The absence of Russian gas supplies to Poland boosts its projects with Norway – photo from Bloomberg

He added that Poland’s reliance on renewable and nuclear energy sources allows it to reduce Arab imports – as well – at a near stage, according to Bloomberg Agency quoted press statements today, Sunday, May 22, about his government’s energy policies.

On April 27, Russia’s Gazprom announced the suspension of Russian gas supplies to Poland and Bulgaria, which are located on the European continent, in response to the two countries’ refusal to respond to President Vladimir Putin’s decision to oblige unfriendly countries to pay in rubles for Russian gas supplies.

Gazprom’s decision at the time raised gas prices to record levels of more than 16%, at a time when the European Commission had reservations about the decision, considering it “unacceptable and a tool for blackmail.”

At the time, the President of the European Commission, Ursula von der Leyen, confirmed that the European Union countries are ready for the scenario of cutting supplies, and they have several alternatives to compensate for the absence of Russian gas from the countries of the old continent.

Profits and supplies of Russian gas to Poland

During his statements today, Prime Minister Mateusz Morawski referred – indirectly – to his country’s ability to overcome the absence of Russian gas supplies to Poland, as he talked about the high returns achieved by the gas project between Warsaw and Norway.

The rise in oil and gas prices on global markets, following the Russian invasion of Ukraine in late February, boosted Polish profits in the sector.

The profits of the Polish state gas company BGNIG more than doubled in the first quarter of this year, before calculating interest, taxes and depreciation, amounting to 9.6 billion zlotys (the equivalent of 2.19 billion US dollars).

(1 Polish zloty = 0.23 US dollars)

The increase in profits was driven by the cooperation achieved between the Polish Gas Company and the concerned authorities in Norway, which accounted for nearly half of the gas profits in Poland during the first quarter.

Russian gas
The absence of Russian gas supplies to Poland accelerates the gas pipeline project with Norway – Photo by NS Energy

Morawski stressed that Norway should reap its share of the huge profits boosted by high energy prices following the invasion of Ukraine and the halting of Russian gas supplies to Poland.

However, the Polish Prime Minister pointed out that the huge payments that his country had to pay to Norway – despite its right – came as a result of Russian practices recently, especially since those payments doubled to nearly 4 or 5 times last year.

Cooperation with Norway

At the end of last year, the subsidiary company of the Polish Gas Company in Norway (PGNIG Upstream Norway) launched its work to develop the first phase of the world’s longest gas pipeline, on the Norwegian continental shelf, to connect the production of gas wells.

The tripartite cooperation between Poland, Norway and Denmark aims to develop offshore gas resources from various fields, including the “Ervogel” field, and link them to the production infrastructure, according to the company’s website.

Poland’s agreement with Norway and Denmark was a powerful driver, strengthening its ability to dispense with Russian gas and refusing to pay in rubles.

Over the course of this year, Poland continues to complete the stages of the pipeline to compensate for the absence of Russian gas supplies, in light of the increase in domestic demand by more than 50% during the current decade, following a transitional phase that the country is going through, by dispensing with coal-fired power stations and building new alternative facilities.

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