NGFE Reports: Poland’s big plans for Natural Gas

If the number of articles in the international media is anything to go by, Poland is an ‘eager beaver’ when it comes to developing its shale gas potential. But whether it has the gumption to actually sink its teeth into the industry is another question.

At the Global Shale Gas Summit in Warsaw, Poland a representative of the Polish government told how responsible Polish ministries and the business community were going about nurturing the country’s shale gas potential.

The Head of the Natural Gas Division at Poland’s Ministry of Economy, Malgorzata Szymanska, assigned to speak on Understanding Legal & Regulatory Frameworks & Outlining what Government & Industry are Doing to Realize the Potential for Shale Gas in Poland, was a bit short on specifics at this time, perhaps because at present natural gas does not comprise a huge slice of Poland’s energy mix pie.

“The share of natural gas in the energy mix of Poland is not more than 13%,” said Szymanska, “and the use of natural gas is not very popular. Compared with other EU countries this is a big difference and thus there is a huge room for manoeuvring.”

She said that Poland’s natural gas usage is so small because its use in producing electricity is not that high. But the natural gas the country does use is largely imported.

“We consider our level of dependence on external supplies to be 73%,” reported Szymanska. “We have our own natural gas reserves, and we produce about one third of our own domestic supply.”

Some change, she said, may be occurring as prospects for shale gas in Poland open up.

“In 2008 most of our gas came from Russia (almost 50%), with almost 30% being indigenous. Since January 2009 we have been in deliberation on gas supplies to Poland from the Russian Federation and we need to achieve consensus with the European Commission on this.”

“Every four years the Ministry of Economy is preparing a forecast on usage and supply, so we can adjust this policy as new possibilities are raised.”

According to Szymanska, in March of next year the Polish government plans on implementing a Natural Gas Act, which would cover security of supply and protect customers, as well as an act that would require Poland to maintain gas reserves. She said that Poland’s Ministries of the Economy State Treasury and Environment, along with the Energy Regulator Office, all deal with natural gas matters in Poland.

She listed the country’s main natural gas projects like building a connection with Western Europe through the Czech Republic, connection with the German system, expanding capacity to supply gas to Ukraine, and development of the Swinoujscie LNG terminal in Poland, adding that her country could access EU funds until 2014-15 to expand existing natural gas capacity to 2.5 billion cubic meters.

As part of an Action Plan for 2010, the Government aims to develop competition mechanisms, strategize on how to lose gas price fixing, and protect domestic customers in Poland who are sensitive to price changes.

In terms of shale gas development in Poland, the Government appears to be relying on the industrial sector to push things forward.

“We’d like to identify the problems and compile a list of barriers to be tackled by the administration in cooperation with the gas sector,” said Szymanska. “Over 30 companies are present on the market to help us identify the barriers,” which she said included environmental, water supply, and nature conservation concerns.

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