[ANALYSIS] The Three Seas Initiative too energetically-dependent on Russia
Energetyka Rosja

The level of energy imports from the Russian Federation is still too high in the region. Although recent years have seen a series of investments that have allowed the diversification of supply sources and increase integration in Central Europe, the dependence on imports from the East is still noticeable.

In the case of Poland, crude oil supplies from Russia are dominant. In 2020, we again recorded an increase in imports from this direction, which exceeded the level of 70% of the total demand for the raw material. This is less than five years ago (as much as 77.2% of crude oil came from Russia in 2017), but still an alarmingly large amount.

The market decides

This year, our oil tycoon PKN Orlen declared that it will pay Russian suppliers PLN 1 billion less than in 2020 in the next 12 months. According to the company, the amount of imported raw material may decrease by 33-45%. This trend is expected to continue in the coming years.

However, political will is not enough. It is primarily the market that decides. Russian oil is the closest. In addition, our infrastructure is mainly adapted to the processing of Russian raw material, so technological investments will also be of key importance. The new installations will open Poland to higher volumes of raw material processing from other countries.

Similar moves are also expected in the natural gas market. The expansion of the LNG gas terminal in Świnoujście and the construction of a floating terminal in the Bay of Gdańsk have started the diversification of supplies. The next step will be the Baltic Pipe gas pipeline, which will supply natural gas from Denmark and Norway.

Gradual diversification, but Russia is still the largest exporter

As our country has large natural gas resources, by adding the above investments, in the future we will be able to meet our own needs for blue fuel supplies. Domestic deposits provide up to 1/4 of the domestic demand for this raw material.

Next year, gas will also be supplied to Poland by the Lithuanian state-owned company Ignitis Group, via the floating terminal in Klaipeda and the GIPL gas pipeline under construction. It will be the first gas connection between the eastern part of the Baltic Sea and continental Europe.

The Baltic countries are also connected with the EU through the Balticconnector gas pipeline, connecting Finland with Estonia and Latvia. The gas pipeline was commissioned last year and gas can be transferred in both directions. As a result, gas dependence not only in the Three Seas countries has decreased, but also in Finland, where Gazprom’s direct exports fell by 35%..

Nevertheless, the export position of the Russian Federation in the Three Seas countries is still dominant. The political doctrine of maintaining its influence in the region of Central and Eastern Europe is continued. While the dependence on Russian gas in Western Europe is at the level of 30%, in the Three Seas countries it is at least 60%.

Three Seas energy: how to counteract the domination of Russian resources?

Therefore, cooperation in the region is one of the most important priorities of energy security. The domination of the Russian raw material in NATO countries is unprecedented and must raise concerns. Slovakia and Hungary are particularly dependent on Russian gas. This makes it difficult to take uniform decisions, especially with regard to the latter country.

The Three Seas is still struggling with the remnants of solutions from the USSR, especially in the field of infrastructure. Therefore, individual countries must take care of their strategic security. Hungarians have a very integrated system with their neighbors. The Czech Republic, on the other hand, tied its energy security with the German system.

The situation may be improved by the North-South gas corridor. The Baltic Pipe and the planned Adria LNG terminal in Croatia will make it possible not only to become independent from supplies from one direction, but also to export the raw material to most of the Three Seas countries. Thanks to this, Poland may become a regional gas hub and a stable gas intermediary from the Norwegian shelf and the USA.

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