“It was a great day when, early on the morning of Saturday 1 October 2022, I received a text message from Energinet saying that the first gas had run through Baltic Pipe at 6:10 am that morning. The week leading up to this had seen marathon negotiations to get the necessary contractual basis in place to put the gas pipeline into operation. It marked the culmination of a long and complicated negotiation process,” says René Frisdahl Jensen. René is a partner at Horten and part of the advisory team that has assisted Energinet since preparation for the Baltic Pipe project began in 2016.
Energinet’s contribution to the large project consists of 105 kilometres of pipeline in the North Sea, approx. 210 kilometres of underground pipeline across Denmark, expansion of the receiving terminal in Nybro near Varde, and a new compressor station at Everdrup in South Zealand. René Frisdahl Jensen sees it as a great privilege to have helped realise such a large and important energy infrastructure project.
“Professionally, it has been very interesting to be part of a project that has spanned such a long time frame, with so many complex and diverse legal issues. It is also especially satisfying that it is a project with great significance for society.”
Baltic Pipe has been an unusual project, because of its large scale and complexity, and the many challenges that had to be resolved along the way. The pipeline crosses borders, motorways and watercourses, protected nature areas, wildlife areas and ancient monuments – which all had to be handled with care.
René Frisdahl Jensen specialises in energy and supply law, and has more than 20 years of experience in the field. While consulting for Energinet, which is responsible for the Danish section of the Baltic Pipe project, he used both extensively. Especially in situations where the project moved into unknown territory and there was no practice to draw on.
“The energy sector is subject to very heavy and complex regulation. Yet there are still things that the legislation does not address, so despite being specialists with many years of experience in the field, we have also found it challenging at times. Baltic Pipe operates across borders and regulations, and involves many different parties. This results in a complex of many contracts that have to be agreed and fit together as part of a whole, and the end result has to be approved by the authorities,” says René Frisdahl.
The complexity alone meant that situations arose where alternative legal ways to drive the project forward had to be found.
“The green transition and the intensified focus on security of supply mean that we often face legal difficulties that need to be resolved quickly and efficiently, but where there is no established practice for how to interpret the rules. The rules may not even have been written yet. And there are no previous energy infrastructure projects that are fully comparable to Baltic Pipe in regulatory terms. In these situations, it is crucial as a legal adviser that you dare to step up and choose a path. Because we have to complete the project,” says René Frisdahl Jensen.
A good example is the common market zone that was developed specifically for Baltic Pipe.
“If an energy company wants to use Baltic Pipe to transport gas, the common market zone means they only have to make one request to get access to the entire Danish section of the link, from the Norwegian upstream pipelines in the North Sea, through the Danish gas transmission system and on to the Polish submarine pipeline. This has not been seen before, and it took a lot of legal legwork to construct a model that the authorities could approve.”
Security of supply
While Energinet is responsible for the Danish section of the Baltic Pipe project, state-owned Polish Gaz-System is responsible for the Polish section, and is therefore Energinet’s primary partner in the project. Baltic Pipe will reduce carbon emissions in Poland as coal is replaced with natural gas, but given the energy supply situation following Russia’s invasion of Ukraine, Baltic Pipe has become even more vital.
“Poland is a large country which has coal as its primary energy source. Construction of a pipeline with a capacity of ten million cubic metres of natural gas per year is therefore a significant step forward for Poland’s green transition."
About Baltic Pipe
Baltic Pipe is a gas pipeline that connects the gas systems in Norway, Denmark and Poland. It runs from the Norwegian Europipe II gas pipeline in the North Sea, through Denmark and the Baltic Sea, to Poland, from where it will supply millions of consumers in Eastern and Central European.
Construction began in 2020 and was finally completed in September 2022. The pipeline is now operating at full capacity, which is ten million cubic metres of gas per year.
Energinet has been responsible for the construction work in Denmark. Polish Gaz-System has been responsible for the section from the Baltic Sea to Poland.
Baltic Pipe has received support from the EU, and is on the list of key European infrastructure projects.