May 4, 2020 / 9:03 AM / a month ago

Poland agrees $306 mln Baltic Pipe deal with Italy's Saipem

GDANSK/WARSAW, May 4 (Reuters) - Polish gas grid operator Gaz-System said on Monday it signed a 280 million euro ($306 million) contract with Italian oil services group Saipem to build a section of the Baltic Pipe between Denmark and Poland.

Warsaw views the planned link as a way to diversify its gas supply, most of which is imported from Russia under a long-term contract with Gazprom that expires in 2022.

The contract, signed with Saipem’s British subsidiary, includes the construction of a concrete-coated pipeline between Denmark and Poland, microtunneling and civil works, which Saipem said in a statement would commence immediately.

The capacity of the 1.6 billion euro Baltic Pipe, which is expected to connect Poland with Norwegian gas fields via the Baltic Sea and Denmark in October 2022, will be 10 billion cubic metres (bcm) a year.

“We have already contracted all major contractors and suppliers necessary to start the construction of the gas pipeline connecting the coasts of Denmark and Poland,” the head of Gaz-System Tomasz Stepien, said in a separate statement. ($1 = 0.9139 euros) (Reporting by Agnieszka Barteczko and Anna Rzhevkina; Editing by Alexander Smith)

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