DZP has advised Gaz-System during the construction of Baltic Pipe

DZP represented industrial gas pipeline operator Gaz-System during the construction of Baltic Pipe, a strategic infrastructure project designed to increase Poland's energy security. This joint investment by Polish and Danish gas transmission system operators has created a new supply corridor on the European market.

Our law firm supported the client in both procurement and contractual issues relating to the construction of the offshore and onshore parts of the project.

The project was carried out by an interdisciplinary team at DZP led by Partners from the Infrastructure and Energy Practice Paweł Grzejszczak and Katarzyna Kuźma, and Wojciech Hartung, Counsel.

You can read about earlier stages of our advice on this project here:

• Baltic Pipe: general contractor selected for gas pipeline
• Baltic Pipe: Gaz-System signs a contract for the supply of pipes for the construction of the Polish section of the Baltic Pipe pipeline

Details of DZP's advice on Baltic Pipe construction:

I. Procurement advice:

DZP advised Gaz-System on developing a procurement structure enabling timely selection of contractors for both the offshore and onshore parts of the Baltic Pipe project and on regulations providing a basis for competitive contractor selection processes.

DZP's public procurement team also provided comprehensive advice in the tender procedures themselves, in terms of preparing procedure documentation, assessing bids and selecting a contractor.

As regards the offshore part of the project, DZP participated in two key procedures conducted by Gaz-System leading to the selection of a general contractor for the offshore section of the Baltic Pipe pipeline and a supplier of pipes for this section.

With regard to the onshore part of the project, DZP provided support in tender procedures for the selection of contractors for the onshore sections of the gas pipeline in Poland in, e.g. the following procedures:

•  extension of the Gas Compressor Station in Goleniów
•  extension of the Gas Compressor Station in Odolanów
•  extension of the Gas Compressor Station in Gustorzyn
•  construction of a gas pipeline to connect the Baltic Pipe offshore gas pipeline with the national gas transmission system
•  construction of the DN1000 Goleniów-Lwówek gas pipeline together with the infrastructure required to operate it

II. Contractual advice

For the offshore part of the project, DZP prepared draft agreements for the selection of both the pipe supplier and the general contractor for the gas pipeline, and also played a leading role in negotiations with the participants in the tender procedures. DZP prepared individual versions of both agreements after successive negotiating rounds, and also provided legal assistance during the negotiations themselves and in reaching agreement on the client's negotiating strategy. Negotiations were held with leading international companies operating in the sector (negotiations were held with three companies in each procedure). Contracts were prepared in accordance with the international LOGIC standard, widely used for all types of offshore investments.

The work was groundbreaking – LOGIC standards had not previously been used in Poland on such a scale, for such large projects of fundamental importance to the country's energy security. DZP brought about the conclusion of both contracts.

DZP also provided legal assistance with the implementation of both LOGIC contracts (contracts with Europipe GmbH and Saipem Ltd.), interpreting contractual provisions, drafting annexes amending the contracts, clarifying issues that could lead to disputes with the contractors, and making arrangements for accounting for work carried out. Our advice also included the introduction of a uniform "mutual hold harmless" mechanism covering all contractors working for Gaz-System on the Baltic Pipe project, including contractors working under contracts other than the LOGIC contracts signed with DZP's participation.