Poland, Russia sign long-term gas deal, chems to benefit

28 January 2010 09:58  [Source: ICIS news]

PRAGUE (ICIS news)--Polish Oil & Gas Co (PGNiG) has struck a long-delayed gas delivery deal with the export unit of Russia's Gazprom, potentially easing supply issues at chemical and fertilizer producers, the Polish gas monopoly said on Thursday.

The previous long-term gas deal between the two countries expired late last year, and this new agreement extended guaranteed deliveries through to 2037 and also the transit of Russian gas through Poland to Germany using the Yamal pipeline through 2045, PGNiG said.

The lack of a long-term deal had begun to undermine PGNiG — on Wednesday it was forced to cut gas supplies to second-largest Polish fertilizer producer Zaklady Chemiczne Police (ZChP) when severe winter weather combined with uncertainty about future gas supplies meant Poland had to start depleting its strategic gas reserves.

Analysts had said that the lack of a long-term deal might reduce the value of Polish fertilizer and chemical firms currently being privatised. Without it, Poland, which imports about two-thirds of its gas from Russia, would from this year lack 2.5bn cubic metres.

Under the ‘Yamal contract’, Gazprom has agreed to increase annual gas supplies to Poland to a maximum of 10.2bn cubic meters a year.

The gas deal still needs to be approved by Warsaw, but the treasury ministry said the government stood ready to sign it.

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By: Will Conroy
+44 20 8652 3214

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