On 27 September this year, the Baltic Pipe - the first ever offshore gas pipeline connecting Poland with the European energy system - was officially opened and symbolically launched. This is the first such large-scale project in the Polish area of the Baltic Sea. The Baltic Pipe is of strategic importance for energy security, as it has enabled the creating of a new gas supply corridor in Europe, allowing gas to be transported from Norway to the Danish and Polish markets, and also to end-users in neighbouring countries. The pipeline also enables the transmission of gas from Poland to Denmark. The investment is being carried out by the Polish gas transmission pipeline operator Gaz-System in cooperation with the Danish operator Energinet.

The project consists in the construction of an offshore gas pipeline connecting Poland and Denmark, to ensure stable gas supplies from the Norwegian shelf to Poland via Denmark after Poland terminated the Yamal contract for gas supplies from Russia. The Baltic Pipe can transport up to 10 bcm of natural gas to Poland and up to 3 bcm of gas from Poland to Denmark annually. The project will help increase the availability of gas on the Polish market and maintain competitive prices for consumers owing to the diversification of sources of gas supply.

“The gas pipeline crosses the territories of Poland, Sweden and Denmark and its development has been regulated by several jurisdictions. The project required complex analyses of the regulatory environment for offshore infrastructure projects, including resolving issues arising from the new pipeline crossing existing offshore infrastructure. We are delighted to have been able to contribute to its successful completion,” – says Jacek Kozikowski, PhD, Partner, Head of the Infrastructure Practice.

“The project is unique and innovative in many respects, particularly because it is being carried out jointly by a Polish and a Danish operator, with the Polish company, Gaz-System, becoming the operator of the pipeline also outside Poland, i.e. of the Danish and Swedish sections. Another innovative aspect is Cross-Border Cost Allocation (CBCA) whereby the Polish transmission system operator partially financed the construction of a gas compressor station in Denmark and settled the costs in its future tariff, which required coordinated decisions on the part of the Polish Energy Regulatory Office (URE) and its Danish counterpart (FORSYNINGSTILSYNET). This is definitely an unprecedented undertaking in the European gas market, substantially changing the directions of gas supply from east to west,” – adds Wojciech Wrochna, Partner, Head of the Energy, Natural Resources & Chemicals Practice.

Kochański & Partners’ remit included providing legal advice on several significant areas of the preparation of the Baltic Pipe project, such as conducting regulatory analyses concerning the crossing of offshore gas pipelines, in particular with regard to international law, i.e. the United Nations Convention on the Law of the Sea, and the Act on Maritime Areas of the Republic of Poland and Maritime Administration. Experts from Kochański & Partners drafted the Construction Agreement and represented Gaz-System in negotiations of this agreement with Energinet. In addition, the Kochański & Partners team was responsible for drafting heads of terms for the Pressure Service Agreement (PSA) and representing Gaz-System in the negotiations of this agreement, and also for the model for services contracting in the implementation of the project.

The Kochański & Partners team comprised Wojciech Wrochna, Jacek Kozikowski, Aleksander Galos, Michał Będkowski-Kozioł and Milena Kazanowska-Kędzierska.

Gaz-System S.A. is a company of strategic importance to the Polish economy, with responsibility for the transmission of natural gas via managing the major gas pipelines in Poland and is also the owner of the President Lech Kaczyński LNG Terminal in Świnoujście. As part of the 2015-2025 investment programme, Gaz-System is constructing more than 2,000 km of new gas pipelines in the western, southern and eastern parts of Poland.