Poland's PGNiG says won't use Baltic Pipe fully as gas demand set to ease

Electric poles are pictured in front of the PGNiG Termika Zeran thermal power station after sunset in Warsaw, Poland June 19, 2019. Picture taken June 19, 2019. REUTERS/Kacper Pempel/File Photo

WARSAW, May 19 (Reuters) - Polish gas company PGNiG (PGN.WA) sees no need to use all the capacity it booked in a new pipeline from Norway as soaring energy prices are likely to curb demand.

The Baltic Pipe, capable of shipping up to 10 billion cubic meters (bcm) of gas per year from Norway, where PGNiG produces the fuel, will open on Oct. 1.

If fully used, the link could entirely replace the supplies Poland has been receiving for years from Gazprom under a contract that expires at the end of this year. Russia stopped sending gas to Poland in April after Warsaw refused to meet its demand to pay for gas in roubles.

"Today, I don't see a need to use the maximum of the capacity we booked in the Baltic Pipe," said Robert Perkowski, PGNiG's chief operating officer.

The company plans to ship 4.5 bcm of gas per year via the link, using more than a half of the capacity it booked in the pipeline. PGNiG's own production in Norway is set to provide 3 bcm, while the remainder will come from contracts with Denmark's Orsted and Poland's Grupa Lotos.

"When we were booking the capacity in 2018, we were assuming gas demand in Europe would be rising, today we can see a weakening in gas consumption," Perkowski said.

The company said the combination of several interconnection pipelines with neighbors, full usage of the liquefied natural gas (LNG) terminal on the Baltic Sea and domestic output mean PGNiG is not concerned about security of supply.

With gas storage facilities filled to 90% and some 2 percentage points of the capacity usually left unfilled as a buffer, Poland has almost completed the process of stockpiling gas ahead of the winter, Perkowski said.

Reporting by Marek Strzelecki; editing by Barbara Lewis

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