Poland’s Unconventionals a Huge Opportunity for Europe

Poland’s Ministry of Economy no doubt has a pretty good notion of what the pending development of the shale gas industry could mean for the country.

That was evident in the first slide presented by Sylwia Sikora of the Natural Gas Unit at Poland’s Ministry of Economy to delegates at Shale Gas Results in Europe 2011 in Warsaw, Poland.

Entitled “Energy Security in Poland,” it outlined Poland’s main goals in that sphere, including reliability of supply, economy, environmental protection and political conditions.

Within that context, the title of Ms. Sikora’s talk was Understanding EU Energy Policy Relevant To Unconventional Gas & How The Ministry Of Economy Will Respond To An Increase In Production.

“Poland has a long petroleum history,” she noted. “Unconventional gas deposits are a huge opportunity. Exploration will be possible in not earlier than 10 years.”

It was important for the European Union, she said, adding that it gave it the chance to shake up the energy market. According to her, challenges in Poland included increasing energy demand, insufficient infrastructure and the regulations on environmental protection.

She spoke of a government document entitled “Energy Policy of Poland until 2030.” “Its main priorities are to improve energy efficiency, enhancing security of fuel and energy supplies, reducing the environmental impact of the power industry and to develop competitive fuel and energy markets, among others.”

Sikora added: “The production of each energy resource is very important for the environment and has to take into consideration ecological issues.”

According to her, Poland had large deposits of coal which played a significant role in the energy market. “Our tendency,” she said of Poland, “is that 70% of natural gas comes from imports and 95% of crude also comes from imports too.”

Polish policy aimed to diversify supplies, she said.

“Poland does not use that much natural gas when compared with other countries in Europe,” explained Sikora. “Some smaller countries use greater volumes, like Belgium or Italy. Domestic consumption is rising, but production is maintaining a constant line. We can see the dependence of supply on this source. 10 BCM comes from Russia.”

She said that the biggest user of natural gas in Poland was industry and that households used almost 28% of it. Poland’s use was about one third of other EU countries’ use.

“In the EU 25% of energy production comes from natural gas, and 39% wind energy, among others.”

Sikora showed a map of planned natural gas power plants in Poland, saying that there were plans for the construction of seven of them.

“What can we do?” she asked of natural gas infrastructure projects. “We can rebuild our technical capacities in Poland. There are two interconnectors with Germany and Czech Republic. In the next half year Poland will have 0.5 BCM in capacities. In 2013 an LNG facility will be ready.”

“When you compare all strategic projects in Poland, the volumes which will come from interconnectors (with Germany and the Czech Republic), an LNG terminal (5BCM/year), Polish companies are realizing projects related to underground gas storages. We plan on rebuilding an underground gas storage facility to 3.8 BCM.”

“Now shale gas development is very important; we don’t know what volumes it will be possible to produce but we are very optimistic and want to be helpful to shale gas investors,” said Sikora of the Ministry. “We maintain dialogue between us.

She said that the ministries involved in shale gas development were Environment, Mining, Treasury and Foreign Affairs.

Regarding Poland’s pending, revised mining legislation, she said: “Three meetings have been organized to find the best solutions for changing this situation and making a more elastic law.”

Sikora noted that Poland was a member of the Global Shale Gas initiative.

“We have tried to learn how the US administration helped develop their shale gas project. It’s very helpful to see how the experienced countries have realized these projects.”

Among her conclusions were, “Increasing natural gas production, including access to external resources, is an important policy direction in terms of an increase in the level of energy security in the oil and gas sector.”

She said there was an opportunity for Poland to rely on its own gas resources for many years and, potentially, to export gas.