Gazprom Fiber Line Outrages Warsaw

Warsaw knew Gazprom was building a pipeline across Polish territory. But what it did not know, and now finds outrageous, is that the pipeline includes a fiber-optic cable of such high capacity that it could potentially handle all telecommunications traffic between Russia and Western Europe.

"[The cables] capacity is sufficient to carry about 37 million simultaneous phone calls, or to transmit 70,000 encyclopedia volumes per second," said Andrzej Jajszczyk, a professor in the telecommunications department of Krakows University of Mining and Metallurgy, in an e-mail interview with The Moscow Times.

Jajszczyk said that in principle, the fiber-optic cable could begin operating within a matter of weeks.

In practice, however, the cable will need permits and licenses from the Polish government and according to the Polish daily newspaper Gazeta Wyborcza, some ministries are so hostile to that idea that they are instead talking of seizing control of the cable, or severing it.

Polish Foreign Minister Wladyslaw Bartoszewski has struck a cooler tone, insisting Wednesday that seizing or cutting the cable is not a serious option under consideration. "The Polish cavalry is not planning to again storm Smolensk," Bartoszewski said, in remarks reported by Gazeta Wyborcza.

Bartoszewski is to receive Russian Foreign Minister Igor Ivanov in Warsaw on Thursday the highest-level Russian official visit to Poland in four years in a trip planned before Warsaw was aware of the fiber-optic cable.

Bartoszewski expressed confidence that he and Ivanov would take up the cable dispute and resolve it in just a few hours of discussion.

Ivanov was similarly upbeat on the eve of that meeting. Upon his Wednesday evening arrival in Warsaw, he told journalists, "Our relations, we hope, have began to warm up. There are no differences between us that cannot be overcome."

A main topic of discussion between Ivanov and Bartoszewski will be Gazproms various European pipeline projects, most of which run at some point through Poland.

One a 600-kilometer affair that has been built backward from Germany through Poland, Belarus and across European Russia to the Yamal Peninsula in the north came into operation in September, and has already carried billions of cubic meters of gas from Russia to Europe.

All such pipelines include some sort of accompanying fiber-optic cable, so pipeline operators can transmit computer information to regulate the flow of gas.

What is unusual about the fiber-optic cable on the Yamal-Europe pipeline, however, is that it can carry such an extraordinary amount of telecommunications traffic.

"Pipelines need the technical support of such cables," said Krzysztof Luft, a spokesman for the Polish government, in a telephone interview from Warsaw. "However, we have information indicating that the capacity of this cable is much larger that which is needed for pipeline maintenance."

Luft said that Polish Communications Minister Tomasz Szyszka had established a special commission to investigate the fiber-optic cable, and by the end of the week would present its findings to the government.

Agreements signed between the Polish government and Gazprom in 1996 permit Gazprom to lay high-capacity data transmission cables.

But according to Gazeta Wyborcza, they specifically state that such cables can only be used to service Gazprom pipelines.

Having passed the stage of initial outrage at the size of the cable, however, the Polish government now seems more interested in talking about how to get a cut of revenues generated by any potential commercial phone traffic the line may carry.

Warsaw is already expecting a hefty chunk of revenue from gas transit fees perhaps as much as $500 million annually, provided a second planned branch of the pipeline is also built through Poland, said Gennady Krasovsky, oil analyst for the Nikoil brokerage.

Neither the press services of Gazprom nor of its subsidiaries involved in the telecoms business had any comment on the stealth cable across Poland.

Warsaw now seems to be after a cut of potential future revenues from the cable.

Both that cable and the gas pipeline are jointly owned by Gazprom and by Polands state-owned natural gas monopoly, PGNiG, via a Russian-Polish joint venture called EuRoPol Gaz.

The cable is to be operated in turn by PolGaz Telekom, a telecommunications company owned in equal parts by EuRoPol Gaz, by Polish gas trader Bartimpex and by Gazproms telecommunications subsidiary Gaztelekom.

Natural monopolies are often also natural telecommunications players: From the Russian Railways Ministry to the UES national power grid to Gazprom, each has a web of national infrastructure upon which to drape fiber-optic line.

Gaztelekom, set up in 1996 by Gazprom and its subsidiary Stroitransgaz, is just one effort to play to that natural advantage.

Gaztelekom has strung fiber-optic cables in various patches of Russia, and according to a research note written by the consulting company Json & Partners, Gaztelekom is now busily combining several of its networks in order to become a long-distance provider within Russia.

The company also plans to build a Moscow-Brussels international fiber-optic link, JSon & Partners said. It also plans to undertake the construction of a cable connecting Turkey and Russia in early 2000, according to a communiqu? of the Italian company Pirelli.

And while it has not filed paperwork to run telephone traffic along its pipeline through Poland, that seems a likely plan too.

But when asked if Gaztelekom plans to compete against Rostelekom Russias main international phone service provider for the market in handling Russian calls abroad, Anton Pogrebinsky, a Json & Partners telecommunications analyst, was skeptical.

"The primary purpose of Gaztelekom is to serve the needs of Gazprom," he said.

Pirelli, a Milan-based corporation producing cables and tires, supplied Gaztelekom with 1,600 kilometers of fiber-optic cables for the Yamal-Europe telecommunications line.

The company also hopes to provide cables for Gazproms Blue Stream project, a pipeline that will link Russia and Turkey.

Aimone di Savoia Aosta, chief representative for the Moscow office of Pirelli, said Wednesday his company has "a very good relationship with Gaztelekom," which is currently the companys only major Russian client for fiber optic cables.

Meanwhile, a consortium of European companies have signed a preliminary agreement to begin construction of a second branch of the Yamal-Europe pipeline that is supposed to cross Poland and bypass Ukraine, Interfax reported on Saturday.

The second pipeline branch is in part designed to get around Ukraine, where theft from Gazproms pipelines is rampant. But Poland enjoys warm relations with Ukraine, and so the plans to cut Ukraine out of the gas flow are controversial in Warsaw.

Nor does Poland have much reason to feel included in the project: Interfax reported that Poland was excluded from the initial negotiations about the new pipeline and only found out about such plans through the news media.

Staff writer Anna Uzelac contributed to this report.