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Poland Wants to Double Natural Gas Production

Poland wants its natural gas monopoly to double production to more than 8 billion cubic meters a year by 2019, when it is due to start renegotiating its long-term contract with Gazprom, the treasury minister said Wednesday.

The European Union member consumes more than 14 billion cubic meters of gas annually, mostly imports from Russia at a price linked to oil prices and calculated in U.S. dollars, which Poland views as highly uncompetitive.

Treasury Minister Mikolaj Budzanowski said the price PGNiG currently pays is more than other Gazprom customers in Europe pay and higher than spot prices quoted on German exchanges.

Poland hopes increasing output locally of both conventional and unconventional supplies will bolster its position in talks over a new long-term supply contract with Gazprom, expected to start in 2019, three years before the current contract expires.

"Going far above 8 bcm is a strategic goal by 2019," Budzanowski told a parliamentary committee. "It is possible if PGNiG exploits all exploration licenses it has."

PGNiG, which has 226 exploration and extraction licenses in Poland and already produces more than 4 bcm of natural gas annually, has struggled in recent years to increase output.

The group is at the forefront of Poland's shale gas drive, which the country hopes will produce its first output in 2015.

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