PGNiG Wants 20% Discount for Russian Gas – Paper

Poland’s state-owned oil and gas firm PGNiG is seeking a 20 percent discount for supplies of Russian gas from gas giant Gazprom, Dziennik Gazeta Prawna newspaper reported on Tuesday quoting source close to the Polish company.

PGNiG argues other European consumers get Russian natural gas at $450 on average, whilst it pays $550. Poland buys about 10 billion cu m of natural gas from Russia annually, or 70 percent of the country’s demand.

Polish Economy Minister Waldemar Pawlak said in June a fair gas price for Poland should not be higher than Russian gas supply price for Germany, which is about $450 per 1,000 cu m.

The paper also reported PGNiG was going to establish a consortium for geological prospecting of possible shale gas deposits in Poland. The Polish company plans to use information from its surveys during talks with Gazprom to get better terms in a new gas contract.

“This information allows us feel comfortable during talks with Gazprom. We must have a clear answer three years before on how much gas we could produce,” a source close to PGNiG told the paper.

Gazprom export head Alexander Medvedev said in June that the gas giant had completed negotiations with all customers to adjust its prices, except three firms: Germany’s E.ON Ruhrgas and RWE Transgas, and Polish PGNiG.

Last week, Gazprom said it had come to an agreement with E.ON over discounts and would likely sign a deal in the near future.

Gazprom’s prices stipulated in long-term gas supply contracts have long been the subject of heated debate with European customers, in particular E.ON and RWE, which want a spot price mechanism to obtain cheaper gas.

In July 2011, Gazprom made concessions to Italy’s Edison S.p.A, which was the first to file a suit against Gazprom, but dropped its legal action after Gazprom agreed to introduce a spot element into the price formula.


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