Gazprom Signs Corrective Gas Price Contract with PGNiG

MOSCOW, November 6 (RIA Novosti) – Gazprom has signed a revised gas price deal with Poland’s PGNiG, bringing the terms of its natural gas deliveries into line with trends on spot gas markets, the gas monopoly said on Tuesday.

The contract to revise the price terms of natural gas deliveries to Poland via the Yamal-Europe gas pipeline was signed following a working meeting in Warsaw between Gazprom Deputy CEO Alexander Medvedev and PGNiG SA Board Chairwoman Grazyna Piotrowska-Oliwa.

“The price of raw materials agreed through negotiations takes into account current market prices of gas and petroleum products. At the same time, the deal does not question the fundamental principles of natural gas trade: long-term contracts, ‘take or pay’ principles, and also the peg to petroleum product prices,” Gazprom said in a statement.

“The spot component, taking into account realities of the Polish market, will not be directly introduced into the contract.”

Some European energy companies, such as Italy’s Edison, Germany’s RWE and E.ON and Poland’s PGNiG’s, appealed to the Stockholm Arbitration Tribunal last year for a ruling on gas price discounts and a switch to gas spot prices, which were far below gas prices set in Gazprom’s long-term contracts.

Dziennik Gazeta Prawna newspaper reported in July that Poland’s state-owned oil and gas firm PGNiG was seeking a 20 percent discount for supplies of Russian gas from gas giant Gazprom.

PGNiG argued other European consumers got Russian natural gas at $450 on average, whilst it paid $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 the Russian gas supply price for Germany, which was about $450 per 1,000 cu m.

Gazprom has already revised gas price deals with E.ON and some other European consumers and a new deal with PGNiG will close the company’s arbitration proceedings in Stockholm against the Russian gas monopoly.


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