Poland chemical industry 'must make most of gas interconnectors'

27 September 2011 14:42  [Source: ICIS news]

LONDON (ICIS)--Poland's chemical industry must aim to give its competitiveness a major boost by utilising new cross-border gas pipeline interconnectors to break its dependence on the national gas monopoly, the Polish Chamber of the Chemical Industry (PIPC) said on Tuesday.

“It is good that, finally, there is a practical opportunity to test mechanisms to purchase gas at lower prices abroad,” said PIPC director Jerzy Majchrzak.

However, he said companies should ensure that suppliers offering to send gas through the Polish-German and Polish-Czech interconnectors could guarantee stable, continuous supplies.

“I am sure that no company will risk signing a contract with an uncertain supplier,” Majchrzak added.

The newly expanded Zaklady Azoty Tarnow (ZAT) chemical group – now Poland's largest gas consumer with a consumption rate of about 2 billion cubic metres/year (cbm/year) or 70.6 billion cubic feet/year, equivalent to 12% of national demand – would be able to book capacities on the interconnectors to strengthen its hand in negotiations with Polish gas monopoly PGNiG for its gas sourced from Russia, said PIPC.

In the past two years, PIPC has protested on several occasions that Polish chemical companies were periodically having to pay up to twice as much for gas as many of their foreign competitors, hugely affecting their competitiveness and threatening the survival of some firms.

ZAT said that given its new size and the availability of the interconnectors, it is working to redraft its gas purchasing strategy.

In August, ZAT's fertilizer and titanium dioxide (TiO2) subsidiary, Zaklady Chemiczne Police (ZChP), became the first Polish chemical producer to book capacity on the soon-to-be-opened 1.5bn cbm/year link with the German gas grid, which is located at Lasow in Lower Silesia, southwest Poland.

It was soon followed by Polish refining, chemicals and petrochemicals group PKN Orlen, which consumes around 1.2bn cbm of gas annually, and ZAT subsidiary Zaklady Azotowe Kedzierzyn (ZAK), which produces fertilizers and oxo-alcohols and consumes around 400m cbm/year. 

The Polish-Czech interconnector, with a capacity of 17bn cbm/year, was opened in mid-September in Cieszyn – known in Czech as Tesin – a city that straddles the border between southern Poland and the east of the Czech Republic.

By: Will Conroy
+44 20 8652 3214

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