Gazprom Left Alone in Poland

Poland’s national oil and gas corporation has scrapped plans to build a gas pipeline from Denmark, thus making Gazprom the only gas supplier in the country for the time being. The news may help the Russian monopolist to settle a long-standing row with Poland over gas transit rates in the Polish section of Gazprom-run Yamal-Europe pipeline.
Polskie Gornictwo Naftowe i Gazownictwo (PGNiG) announced Thursday it would not build a gas pipeline from Denmark to Poland via Baltic Sea, pulling out of a deal with Denmark’s DONG due to high gas prices that the Danes offer. Denmark and Norway were willing to sell gas to Poland at $350-400 per 1,000 cu. meters the lowest whereas Gazprom send its gas to the country at $280/1,000 cu. meters.

Poland consumes 12 billion cu. meters of gas annually, 7 billion of which comes from Russia.

Gazprom’s spokesperson Sergey Kupriyanov confirmed to Kommersant Thursday that the Russian monopoly was ready “to provide Poland, just like any European country, with gas in the amount they need”. There is no talk about building second branch of the Yamal-Europe pipeline, though, since Poland is obliged to buy 11 billion cu. meters of gas from the first branch, which it does not do.

Gazprom, which dominates the Polish gas market, does not have full control over gas transit in the Yamal-Europe pipeline through the country, with a 48-percent stake in the pipeline’s operating company, EuroPolGaz. With a larger holding in the operator, Gazprom would be able reduce transit rates for pumping Russian gas via Poland, which it has been striving to do for the past few years. Gazprom accused its Polish colleagues of setting the rates too high, which ultimately increases Gazprom’s costs and pushes up gas prices for consumers.
Source:kommersant.com