Poland’s PGNiG to no longer conclude long-term contracts with Gazprom

05.09.2019

The Polish oil and gas company PGNiG (Polskie Gуrnictwo Naftowe i Gazownictwo) does not plan to conclude long-term contracts with the Russian Gazprom in the future, the company’s head Piotr Wozniak said on Wednesday. He was talking at the 29th Economic Forum, which is taking place in southern Poland.

"We have no plans to enter into long-term contracts with our partner called Gazprom," he said, adding that cooperation with the Russian company "creates risks."

Wozniak noted that PGNiG’s current long-term contract with Gazprom expires in 2022. "In 2022, many things will change," he stressed, meaning that the contract will expire that year. He recalled that now Polish consumers receive the Russian gas mainly under the so-called Yamal contract with Gazprom, "the price of which is too high."

Poland consumes more than 15 bln cubic meters of gas per year. Of this volume, it produces one third independently on its territory while importing the rest.

Gazprom is the main supplier of gas to Poland. Under a long-term contract with Gazprom, Poland can annually acquire 10.2 bln cubic meters of gas.

In 2012, the parties agreed to reduce gas prices by 10%. In 2015, PGNiG filed a suit against Gazprom to the Stockholm Arbitration Court. Warsaw claims the price of gas in the current agreement is overestimated and does not correspond to the situation on the European energy market.

The Polish authorities said the country was seeking a replacement for Russian gas supplies until 2022, when the long-term contract with Gazprom would expire. One of the alternatives is to increase procurement of liquefied natural gas supplied by the US and Qatar. For the moment, Poland purchases only small volumes of LNG from those countries. Another possibility is the construction of the Baltic Pipe gas pipeline, which is supposed to connect Poland with the Norwegian offshore gas fields through Denmark.


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