The Polish state energy concern PGNiG has given Gazprom a notice that it will not renew the so-called Yamal gas contract, which expires on December 31, 2022. This was reported on the official website of the company.
The message notes that this notice meets the terms of the contract - the parties should announce plans for further cooperation three years before the expiration of the contract.
The head of the concern, Pyotr Vozhnyak, explained this decision by Poland’s desire to diversify sources of energy supplies.
“In accordance with the desire of the Republic of Poland to ensure the security of energy supplies and the implementation of the strategy of the PGNiG group, over the past four years, PGNiG has taken fundamental steps to diversify the directions of natural gas supplies to Poland. The company has concluded long-term contracts for the supply of liquefied natural gas (LNG) and is acquiring natural gas fields on the Norwegian continental shelf, which, combined with the activities of the transmission system operator in the field of expanding the gas pipeline, allows the completion of the Yamal contract in a timely manner in accordance with its provisions, ” The company’s website said in a statement.
Gazprom Export announced that it had received a notification from the Polish PGNiG, noting that "the possibility of sending such a notification is provided for by contractual conditions."
Gazprom Export continues to supply gas in accordance with the current contract, ”TASS quoted the company as saying.
According to Anna Kokoreva, senior analyst at Coface, an international insurance company, such a notification confirms that Poland does not want to review or renegotiate the contract with Russia on other conditions.
“Recently, Warsaw has invested heavily in developing liquefied gas infrastructure. I think this decision is politically motivated. Poland has long been saying that a political solution is expected - a complete rejection of Russian gas and a switch to American LNG, ”the analyst said.
Pyotr Wozniak in early September 2019 already stated that Poland was not going to extend the gas contract with Russia. Then he explained that Warsaw was not satisfied with the allegedly overpriced price of Russian gas, as well as the take-or-pay system (“take or pay”) stipulated in the contract. Under this condition, the maximum amount that the seller is obliged to provide and the minimum amount that the buyer must acquire, is fixed, regardless of how much he actually purchased in the agreed period.
Partnership with the USA
The policy of abandoning Russian gas has been declared by the Polish leadership earlier. So, in April this year, Polish President Andrzej Duda announced this at the ceremony of signing an agreement on the allocation of funds for the expansion of the LNG terminal in the Baltic port of иноwinoujсьcie. He stressed that the country will receive a significant portion of blue fuel from the United States, as well as Norway.
- Tanker Clean Ocean in the port of иноwinoujцеcie
- Reuters
- © Agencja Gazata / Cezary Aszkielowicz
In early October, the Polish Government Commissioner for Strategic Energy Infrastructure, Peter Naimsky, stated that Warsaw plans to completely abandon Russian gas by the end of 2022.
According to him, Russian fuel should be replaced by supplies from the USA and Qatar through the terminal in Swinoujscie, as well as gas from Norway via the Baltic Pipe gas pipeline.
PGNiG has signed long-term LNG supply contracts with a number of US companies. In October 2018, a 20-year contract was signed with Venture Global LNG, which provides for the supply of 2 million tons of liquefied natural gas annually.
In November 2018, a contract was signed with Cheniere Marketing. According to the agreement, in 2019-2022 Poland will receive about 0.73 billion cubic meters of gas after regasification, and then in 2023-2042 - about 39 billion cubic meters of gas after regasification for the entire period.
In addition, Poland relies on its own production in the North Sea.
“We have been buying deposits in the North Sea - four years in a row. Currently, we have 26 concessions from which we will produce gas. Partially we already produce, and partly these concessions and deposits are in the process of construction and preparation for production, ”RIA Novosti reports Wozniak.
Each year, Poland consumes more than 15 billion cubic meters of gas, of which less than half is produced independently (approximately 5 billion cubic meters). Most of this volume is imported, mainly from Russia. Under the contract, Gazprom annually supplies to Poland up to 10.2 billion cubic meters of gas.
Economic expediency
According to experts, the course towards a complete rejection of Russian gas is politically motivated and was taken with the coming to power in Poland of the Law and Justice party, Yaroslav Kaczynski. Between 2007 and 2015, when the country was ruled by the Civil Platform, Warsaw planned to extend the contract with Gazprom until 2037. These plans were curtailed with the advent of the new ruling party.
- Gas terminal PGNiG
- Reuters
- © Peter Andrews
Warsaw seeks to limit the influence of Gazprom, said in a conversation with RT the head of the regional problems and conflicts department of IMEMO named after E.M. Primakova RAS Konstantin Voronov. However, such a move is unlikely to be justified from a financial point of view, the expert said.
“Liquefied gas from the USA, Qatar or Norway is not cheaper than Russian, or maybe even more expensive, but Poland will buy it in order to put pressure on Gazprom and, accordingly, get some preferences and concessions from it,” noted Voronov.
Poland not only closes the way for Russian gas to its market, but also actively impedes the implementation of joint gas projects between Russia and other EU countries, for example, the construction of the Nord Stream-2 gas pipeline. So, on November 9, the Polish Office for the Protection of Competition and Consumers (UOKiK) imposed a fine of $ 44.5 million on the French energy company Engie for refusing to assist the regulator in the investigation of the antitrust case regarding the pipeline.
In turn, on November 11, Prime Minister of Poland Mateusz Moravecki announced his negative attitude to the fact that the European Union supports the construction of the Nord Stream-2 gas pipeline.
“Nord Stream 2” is the payment of Russian weapons and Russian defense with our European money, ”he said.
As Moravecki added, he is upset that this project enjoys the support of key member states of the European Union.
Experts believe that Warsaw and Washington want to make Poland a center for the re-export of blue fuel delivered from the United States, which will allow the republic to become a large regional gas hub that can influence the European energy market.
“Warsaw wants to become the largest European gas hub and exploit this provision to put pressure on the European Commission in one way or another to limit Gazprom’s influence on the EU’s energy market. But while there are no prerequisites that liquefied gas from the USA, Qatar or Norway will be really cheaper than Russian. This is economically unjustified, ”said Alexei Mukhin, Director General of the Center for Political Information, in an interview with RT.