Polskie Gornictwo Naftowe i Gazownictwo, Poland’s state-controlled gas company, and Gazprom agreed on increased gas deliveries under a deal running until 2037, PGNiG said Friday.
The deal, which still needs to be approved by both governments, follows months of negotiations between Warsaw and Moscow and lessens risk of winter gas shortages in the country.
A major sticking point had been disagreement over the functioning of Europol Gaz, a joint venture between PGNiG and Gazprom that manages the Yamal pipeline in Poland.
“Both sides have agreed on increased deliveries as well as extending the existing contract until 2037. Additionally a compromise was reached regarding management at Europol Gaz and its tariff policy,” the companies said in a joint statement.
Gazprom and PGNiG both own 48 percent stakes in Europol Gaz. The remaining 4 percent is owned by a third company called Gaz Trading.
PGNiG owns about 43 percent of Gaz Trading, Polish businessman Aleksander Gudzowaty has 36 percent through the company Bartimpex, and Gazprom has 16 percent, said Jan Antosik, vice president of Bartimpex.
Prime Minister Vladimir Putin said in September that Europol Gaz should be 50-50 owned by the state gas companies.
Sources close to the negotiations said under the new deal Poland would receive 11 billion cubic meters, or bcm, annually directly from Gazprom if the agreement is approved at an intergovernmental meeting in the first half of November.
Poland, which imports about two-thirds of its gas from Russia, faced an annual shortfall of 2.5 bcm from 2010 and the new deal will plug that gap. Russia is the only supplier able to do so.
The current gas agreement between the countries is due to expire in 2022.
Poland uses about 14 bcm of gas annually, with one-third coming from domestic sources, while the remainder has been imported directly from Gazprom — about 7.5 bcm — and from the now defunct intermediary RosUkrEnergo.
Warsaw could ask for some of the extra gas to be delivered as soon as this year, as cold weather might force PGNiG to cut off supplies to its largest industrial clients this winter.
“I think we will have to take in advance some of this [additional] gas already this year,” a source told Reuters.
Warsaw had wanted to strike a deal by the end of July and to sign it during Putin’s visit to Poland on Sept. 1, but the sides could not agree on all the issues.
Warsaw and Moscow are “much closer” to a final agreement after their respective state-controlled gas companies struck a deal on transit fees and increased supplies, said Maciej Kaliski, head of the oil and gas department at Poland’s Economy Ministry.
Kaliski said he hoped that a final accord could be signed by the governments in December. Poland’s government gave PGNiG the “outline” of the agreement to be sought with Gazprom and must now approve the details, he said.
(Reuters, Bloomberg, MT)