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Poland: Plans Readied To Import Natural Gas From West

Poland's deal this week with Denmark for a Baltic gas pipeline may be a sign that Warsaw is turning west instead of east for energy supplies. But it may also be the latest move in reaction to Russia's plans for building pipelines around Ukraine. Our correspondent Michael Lelyveld reports.

Boston, 21 June 2001 (RFE/RL) -- Poland is reversing a trend this week with a deal to pipe gas eastward from Denmark at a time when the European Union is seeking more fuel from Russia with lines flowing west.

On 18 June, Poland's PGNiG gas company signed an agreement to import natural gas from Denmark through a new pipeline under the Baltic Sea beginning in 2003. The 230-kilometer BaltPipe project is expected to cost $239 million to build.

In announcing the deal, Polish Prime Minister Jerzy Buzek called the pipeline important for his country and most of Central Europe, the "Financial Times" said.

The pact with Denmark's DONG AS gas company envisions a further agreement with Norway to supply gas if a settlement on price can be reached. Norway may also join the pipeline consortium.

The event is notable because of the conflicting currents that have swirled around Poland since last year when Russia announced its intention to alter its energy routes through the region.

After a decade of post-Soviet wrangling over problems with pipelines through Ukraine, Russia said last July that it would seek a new route through Poland. Ukraine has carried 90 percent of Russia's exports to Europe, despite years of complaints that Kyiv has diverted gas and failed to pay for supplies.

The plan for a new route coincided with the EU's push to double its energy imports from Russia over the next 20 years, giving Europe's gas firms an incentive to help Russia's Gazprom with its strategy to bypass Ukraine.

Poland has been caught in the conflict, siding by turns with its neighbor Ukraine while also trying to satisfy the EU, which it hopes to join.

In announcing the deal with Denmark this week, Polish officials cited an EU directive on diversifying energy sources and markets. Poland already depends on Russia for most of its imported gas. Warsaw has also been under heavy pressure from Moscow to approve its new bypass route.

But there are several ways to interpret the Baltic deal. The first is that it is moving in the opposite direction to the Russian-EU plan. While Poland has received small amounts of gas from Germany, the Baltic line may be one of the few projects in years that reverses the flow of fuel from West to East.

The change has symbolic significance for Poland, despite criticism that the northern source of gas from Norway will cost more than Russian supplies.

The question is whether Poland will integrate more successfully with the EU by becoming a market for its gas or a transit country for Russia. It may do both, but its first step seems to be aimed at assuring that it will not rely on Russia alone.

One reason may be the example of Ukraine, which put off reforms for years while using subsidized gas obtained from Russia as transit fees. The result has been waste and debt for additional Russian gas, along with Russian pressure to take control of the pipelines.

Poland may look to its long history for reasons to resist dependence on Russia. Recently, in the late 1980s, the sudden decision by Soviet President Mikhail Gorbachev to halt subsidized oil exports to Eastern Europe forced Poland to turn West for supplies.

But the explanation involving the EU directive may be little more than an excuse. EU members like France have been slow to comply.

Reports in Polish publications "Gazeta Wyborcza" and "Prawo i Gospodarka" suggest another reason for the Baltic pipeline. Just as Gazprom has threatened to detour around Ukraine with a route through Poland, it has also said it may bypass Poland with a direct line across the Baltics to Germany if Warsaw does not agree.

But the Polish reports say that the BaltPipe project would effectively block an underwater line from Russia to Germany. The reason is that pipelines must be laid on the sea floor. As a result, they cannot cross or be laid on top of one another, according to the reports.

If that is the case, Poland's decision may lead to more maneuvers or more concessions to Warsaw as Russia tries to secure its export routes.