6/21/2007

Poland's PGNiG joins Scandinavian gas pipeline project UPDATE

Polish natural gas monopoly PGNiG has signed a deal to take a 15 pct stake in the construction of the Skanled gas pipeline, which could start pumping Norwegian gas to Denmark and Sweden in mid 2011.

The state-controlled firm estimates its share of investments in the 10-strong consortium, which includes German E.ON (nyse: EON - news - people ) Ruhrgas, at 500 mln zlotys.

PGNiG this year sealed a deal giving it access to gas supplies in the Norwegian segment of the North Sea, and has signed a letter of intent with Denmark's Energinet.dk to build the 'Baltic Pipe', which would connect Poland to Danish gas systems.

Each project is a part of Poland's efforts to find different sources of natural gas that can reduce its dependence on Russian deposits.

'The role in the pipeline is a further important step in gaining gas supplies for Poland from Scandinavia,' PGNiG said in a statement.

Poland's conservative government has put reducing the former communist state's reliance on energy supplies from Russia at the top of its agenda, accusing Russia of playing the energy card in its political relations with Eastern Europe.

'PGNiG wants to be in Skanled on the condition that the Baltic Pipe project will be implemented,' Poland's economy minister Piotr Wozniak told a news conference.

The construction of Skanled will start in October 2009 and the link should come on stream in the middle of 2011, he added.

Source: By Patrick Graham(Thomson Financial), forbes.com



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