Following completion of the 10+ Programme, Grupa LOTOS has been focusing on a project concerning cavern storage facilities in Pomerania as the next key element in building safety and solidarity in the energy sector. Günter Verheugen and Paweł Olechnowicz have proposed to initiate a pan-European discussion on safety in the energy sector and the related challenges during Polish presidency in the European Union.

2011 has been the time of revision of the European politics vis a vis the energy sector. A year ago, no one expected such profound changes in the countries of North Africa and their repercussions for the system of crude oil supplies to Europe. No one suspected that the disaster at the Japanese nuclear power plant would bring about the German government's strategic decision to withdraw from this type of energy generation. It is also true that preparations are under way to put into operation the Nordstream gas pipeline, which bypasses Central Europe, transferring natural gas further to the West. The outcome of the Nabucco versus South Stream conflict is hard to predict. The probability of shale gas production is growing not only in Poland, but also in such countries as Ukraine, Romania, Bulgaria, and China. In this context, solidarity and safety in the energy sector are becoming issues of far greater importance. On top of the developments discussed above, efforts have been taken for a number of years now to reduce carbon dioxide emissions, and attempts have been made to decarbonise Europe. However, the idea is that such activities should not decrease the competitiveness of the entire EU economy against other fast-developing countries.

Europe must be looking at the costs and at unemployment

In its statement of position, Central Europe Energy Partners (CEEP) repeatedly drew attention to the reasons behind the weakening competitiveness of the entire EU economy and its dependence on external energy sources. At the time when the second wave of the crisis is looming and the EU is just to enter a new budget period (2013–2020), ambitious plans should take into account social costs and the balance of economic gains and losses.

– Renewable energy resources are not enough to solve the issue of the EU countries' electricity demand – said Günter Verheugen, European Commissioner for Enterprise and Industry in 2004–2010. – Giving up on coal is another mistake. The technologies which are currently available make it possible to use coal without the prior environmental risks. Imposing the same climate obligations on all countries also does not seem right.

The former commissioner believes that it takes time to strengthen the economies of the youngest EU member states and that Brussels should understand this.

The role of Poland and the role of Pomerania

Poland, and especially the Pomerania region, are slowly closing the gap and strengthening their integration with the EU transmission networks. However, before the LNG terminal in Świnoujście is built and the number of interconnectors facilitating transmission of gas in both directions on Poland's southern and western border is increased, our country has to take a pragmatic view on the development of its energy sector.

Due to uncertainty of the events mentioned above and still not sufficiently concrete cooperation of the EU states in the creation of a common energy transmission system, we are not protected against major perturbations in crisis situations and urged to build up strategic stocks.

Given construction of the LNG terminal, completion of Grupa LOTOS' 10+ Programme, extension of Naftoport and construction of oil and gas storage facilities in salt caverns, Pomerania has a major role to play in ensuring better security of the energy sector in Poland and our part of Europe.

Even if in the near future natural gas or shale gas will serve as a bridge through which Europe will move into renewable energy, modernisation of the oil sector and construction of cavern storage facilities in Pomerania is a way to enhance security of Poland's energy sector.

Underground security on the Baltic Sea

According to the plans of construction of underground storage facilities for crude oil and liquid fuels in Pomerania, the region's geographic and geologic conditions, as well as its direct access to the sea and well developed port infrastructure make it a perfect candidate for the role of a regional energy centre.

The construction of storage facilities for crude oil and liquid fuels, such as diesel oil or light fuel oil, is planned to be implemented in two phases by 2020, when the total capacity of storage facilities is to reach 7 million cubic metres. Thereafter, in line with the growing needs of the market, the capacity of the storage facilities may increase to as much as 15 –20 million cubic metres. It should be stressed that both Grupa LOTOS and PERN Przyjaźń intend to develop and implement the project in compliance with the domestic and European requirements concerning environmental protection and all the applicable regulations.

– It is worth mentioning that as of the beginning of this year we have completed the 10+ Programme. This way, Pomerania has gained one of the most advanced refineries in Europe with access to the sea – stresses Paweł Olechnowicz, President of Grupa LOTOS S.A. and Chairman of the Board of Directors of CEEP. – The project involving construction of cavern storage facilities is another element in building Poland's security in the energy sector. I have no doubt that this project will benefit not only our country, but also the entire European Union

As announced earlier, the cost of construction of the storage facilities and the necessary logistics infrastructure is to be partially financed with EU funds, and LOTOS will not be involved in financing of the project. In addition to the construction of storage facilities in salt caverns, the project also includes construction of surface infrastructure, including pumps, pipelines, water-supply and power networks, roads and interconnections to the national logistics systems for crude oil and liquid fuels. A special purpose vehicle will be established for the project. The detailed shareholder structure of the SPV will be defined in the course of further negotiations. The project will be supported by CEEP, which has performed a number of analyses pertaining its implementation.

Poland has to steadily increase its storage capacities for crude oil and petroleum fuels, in order to fulfil its obligations towards the European Union and the International Energy Agency. Construction of storage facilities in salt caverns is the most economically effective and the safest solution to the problem of storage of crude oil and liquid fuels. The construction of storage facilities in Pomerania will enhance the energy security of Poland, states of the Baltic Sea region, as well as member states of NATO and the EU.

CEEP

(Central Europe Energy Partners) is an international non-profit association with its seat in Brussels, Belgium. The association represents the broadly understood energy sector (natural gas, crude oil, renewable energy sources, electricity, interconnectors etc.) from Central Europe. The prime objective of the organisation is to support integration of the Central-European energy sector under a common energy and security policy for the EU energy sector.

Marcin Zachowicz, spokesperson for Grupa LOTOS S.A., ul. Elbląska 135, 80-718 Gdańsk, Poland, tel. +48 58 308 75 70, +48 505 050 454, e-mail: marcin.zachowicz@grupalotos.pl