Poland's Grupa Azoty anticipates cut in 2014 gas expenditure

23 December 2013 15:03 Source:ICIS News

LONDON (ICIS)--Poland's Grupa Azoty expects to cut its gas feedstock expenditure by 0.7% year on year in 2014 despite the average 1.5% hike in gas tariffs next year announced for the Polish industry, the company said on Monday.

Restructuring of the Polish gas market, which is being readied for gradual deregulation, would enable the reduction in gas costs through items such as restricted gas pipeline fees, it added.

Grupa Azoty, which at 2.3bn cubic metres per year is Poland's largest single consumer of gas, added that new pipeline interconnections to the west and south of Poland would increasingly open up opportunities to source non-Russian gas on the spot market.

One project, announced in April this year by Czech gas transmission operator Net4Gas and Polish counterpart Gaz-System, intends to open up Austria’s Baumgarten Central European Gas Hub (CEGH) to Poland.

The gas diversification rate of Grupa Azoty - or in other words, its use of non-Russian gas - could reach 27% next year, the company said.

Natural gas accounted for around 31% of Grupa Azoty's 2013 energy and material costs, estimated investment bank WOOD & Company.

Grupa Azoty is Europe's second largest fertilizer maker, while it is also a major producer of melamine, caprolactam (capro), polyamide 6 (or nylon 6), and also makes oxo-alcohols, plasticizers and titanium dioxide (TiO2).

By Will Conroy