Poland's gas monopoly PGNiG on Thursday reached a long-delayed gas delivery deal with Gazprom, which ensures supply of up to 10.2 billion cubic meters annually.

PGNiG said in a statement that the agreement would extend an existing delivery contract through 2037 and would also ensure transit of Russian gas through Polish territory using the Yamal pipeline through 2045.

"Next week the deal should receive all the corporate approvals. Then it's up to the government to approve it," management board member Miroslaw Dobrut said.

Dobrut declined to confirm whether PGNiG will be receiving cheaper gas.

The Polish and Russian governments and their state-controlled gas companies have been seeking a new contract since early last year, when trader RosUkrEnergo, 50 percent-owned by Gazprom, halted deliveries. The two sides had reached a preliminary deal over extended supplies of gas to Poland in October, but returned to the negotiating table over last minute disagreements related to gas transit fees through Poland.

This accord settles the dispute over transit liabilities that started accumulating in 2006, Maciej Wewior, a Treasury Ministry spokesman, said by phone. Gornictwo will get a discount on gas supplies, he said, without elaborating.

“It’s a well-balanced agreement. Each party had to take a step back to reach it,” he said.

According to a report in newspaper Rzeczpospolita, PGNiG will receive a discount on gas prices in return for dropping its claims for unpaid transit fees from Gazprom.

The deal still requires government approval, but Warsaw has said before that it would be ready to sign whenever the two firms came to an agreement.

Without the deal to boost gas imports from Russia, Poland was forced to tap its strategic reserves and begin to cut supplies to at least one large customer because of the harsh winter.

Poland, which imports about two-thirds of its gas from Russia, faces an annual shortfall of 2.5 billion cubic meters from 2010.

The deal is seen as most important for the Polish chemical makers Pulawy, Police and PKN Orlen's unit Anwil, who are usually first to suffer cuts in gas deliveries when Poland's gas imports are disrupted.

"This is extremely important for PGNiG's largest customers, who can now plan their business for this year based on secure supplies," BZ WBK analyst Pawel Burzynski said. "In terms of PGNiG [share price] the situation has been already factored in by the market."

On Wednesday, PGNiG said it was forced to reduce deliveries to chemical producer Police, forcing it to cut production levels.

(Reuters, Bloomberg)