Poland’s POGC meeting to discuss Yamal II pipeline project
POGC management were due to meet at the end of this month to discuss the development of the second string of the Yamal pipeline (Yamal II), according to Polish Oil and Gas Company (POGC) director Radoslaw Dudzinski.
Speaking at the 20th Annual European Autumn Gas Conference in London, Dudzinski inferred that the project was not dead in the water despite Russia’s drive to build the North Sea Gas Pipeline (NSGP) from Russia to Germany.
Controversy has raged in Poland and across the Baltic in recent months over the Russo-German decision to build the NSGP under the Baltic Sea, potentially depriving Poland of transit fees for Russian gas and increasing Gazprom’s leverage in diverting supplies to higher-paying customers in Western Europe.
Poland’s gas consumption is set to increase substantially as coal-fired power capacity is planned to be replaced with CCGTs. Poland is working to diversify its gas supplies, with ongoing discussions with Ukraine about increasing import capacity from the latter, while domestic exploration in Poland is also expanding. In addition, the EU is undertaking a feasibility study into building a LNG terminal on Poland’s Baltic coast. Poland must find a “second source” of natural gas supply in the next four years, economy minister Piotr Wozniak reportedly said this month. Polish-owned energy company Bartimpex said it had received “interest” from Polish gas transmission company Gaz System to build a 5 billion cubic metre (Gm3)/year, 30km Bernau-Szczecin gas pipeline between Poland and Germany.
The NEGP pipeline is planned to be commissioned in 2010, initially consisting of a single pipeline with an annual transmission capacity of about 27.5 billion cubic metres (Gm³). The project envisages laying a second pipeline and doubling the transmission capacity to around 55 Gm³ per year. The total investment for the twin-pipeline project exceeds EUR 4 billion.
POGC not to be renationalised, Polish PM says
Separately, POGC will not be re-nationalised or de-listed from the Warsaw bourse, Poland’s prime minister Kazimierz Marcinkiewicz reportedly said this month.
The comment goes against recent calls by his treasury secretary Andrzej Mikosz to propose a bill re-nationalising POGC, of which 15% of government stock was floated in an IPO on the Warsaw bourse in September. POGC was unavailable for comment. Mikosz, who had called the sale “a terrible mistake”, is a member of the Law and Justice party, which opposes privatisation of the country’s assets, particularly with regard to the possibility of Russian ownership and ultimately control of Poland’s gas industry.
The conflicting comments add to an already tumultuous time for Poland’s monopoly gas supplier. This month some members of POGC’s management board were suspended by the Treasury-controlled supervisory board, with Mikosz having labeled the management as “bad”. Among the suspended were strategy director Marek Foltynowicz and Pawel Kaminski who oversaw the IPO. POGC c.e.o. Marek Kossowski had already tendered his resignation.
Rising gas prices hit Polish POGC Q1-3 profits
Polish Oil and Gas Company has recorded an 8% fall in EBITDA for the first nine months of 2005 to PLN 2.05 billion (EUR 514.5 million) compared with the same period in 2004, Poland’s gas monopoly has reported.
Prices for imported gas, which constitutes 70% of Poland’s consumption, rose by 30% compared with Q2 2005, POGC said. POGC’s operating profits for Q3 2005 fell sharply year-on-year to PLN 34 million, whereas overall net income for Q1-Q3 2005 was up 29% year-on-year at PLN 598 million
POGC recently received a letter from its principal supplier, the export wing of Russian gas giant Gazprom, Gazexport, seeking to renegotiate gas prices on a contract POGC signed in 1996 and is not due for expiry until 2022. POGC has said it sees no reason to renegotiate.
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