Poland will spend $ 1.5 billion for Gazprom’s rival “Nord stream-2”

If the Polish state-owned company PGNiG gets $ 1.5 billion from Gazprom after winning the Stockholm arbitration, the money will be used to buy Norwegian fields in the North Sea. From there, it is planned to supply gas to the future “Baltic gas pipeline,” which should become an alternative source of Russian gas supplies from 2023. This option is reported by the Polish Institute of International Affairs (PISM) concerning the company.

“6.2 billion Polish zlotys ($1.5 billion) will be a serious gain for PGNiG, whose revenue was 1.37 billion Polish zlotys ($329 million) last year,” the Polish Institute of International Affairs (PISM) reports in its analytical material “PGNiG’s Victory in arbitration with Gazprom.” It examines the benefits that Poland will receive from a successful solution in Stockholm.

“These resources, as reported in the company, can be used both for the acquisition of new oil and gas fields (obviously on the Norwegian continental shelf) and the development of green energy,” the material says.
Recall that by the end of 2022, the Polish PGNiG plans to build and launch the “Baltic gas pipeline” from Norway to Poland with a capacity of 10 billion cubic meters. It will replace Russian gas supplies.
However, PGNiG cannot yet boast of gas production in Norway. According to the quarterly report, for 9 months of 2019, the company received 377 million cubic meters from the Norwegian fields, where it has a share, and for the year production will not exceed half a billion cubic meters. Even in the reports of the Polish state-owned company for the first half of 2018, it was said that PGNiG itself plans to increase production on the Norwegian shelf to 2.5 billion cubic meters by 2022.

Last year and this year, the Polish state-owned company bought shares in several more fields in Norway and theoretically production can increase to 3 billion cubic meters per year. However, this is still more than three times less than the capacity of the Baltic gas pipeline.

Experts noted that the Polish state-owned company can theoretically buy more gas from other companies operating on the shelf, but most of the Norwegian gas is contracted for many years ahead and Poland will have to overpay for supplies or conduct a swap to exchange Norwegian gas for Russian.

Winning from Gazprom can ease the situation with the acquisition of a resource base. However, the question is whether the Polish company will receive any money at all. After all, PGNiG itself did not declare that $ 1.5 billion is already in the pocket.

This week PGNiG declared victory in the arbitration dispute with Gazprom. “We have very good news to tell all poles. After more than five years, PGNiG is winning the price dispute with Gazprom,” — said PGNiG President Jerzy Kweczynski, according to BiznesAlert. — The court agreed that the prices we paid for Russian gas under the Yamal contract were too high and non-marketable. This means that our company will be able to get about 1.5 billion dollars retroactively, which means just over 6 billion zlotys for reimbursing overpaid gas in recent years.”

“We still need to deal with the poles. The wording in the PGNiG statement is fairly streamlined. A large link to hubs (but not direct indexing), etc. Compensation is also apparently not prescribed,” says Alexey Grivach, Deputy Director of the national energy security Fund (NESF). The expert notes that the poles could get such conditions without five-year arbitration, through normal negotiations: “If not for their political line, which, to put it mildly, is not aimed at constructive cooperation with Russia.”

Author: Flyn Braun
Graduated from Cambridge University. Previously, he worked in various diferent news media. Currently, it is a columnist of the us news section in the Free News editors.
Function: Editor
E-mail: Braun.freenews@gmail.com