Poland confirms changes to gas diversification rule

Karolina Zagrodna

16-Apr-2015

Polish wholesale natural gas market participants could be able to import unlimited amounts of gas from other European hubs from next month when changes to Poland’s diversification rule come into force, documents published by energy ministry on Wednesday show.

The new diversification rule, expected to come into force 14 days after the announcement, will allow Polish shippers to import uncapped amounts of natural gas from the countries within the European Free Trade Association ( EFTA).

Several companies active on the Polish natural gas market, including the country’s incumbent PGNiG, welcomed the changes as they will open up more trading opportunities between Poland and other European gas hubs and lessen the country’s dependence on Russian imports.

Regulation

Before the changes, the use of gas that has been imported from Germany through the Yamal pipe using virtual reverse flow has been one of the main grey areas for shippers complying with the diversification rule. By revising the law, the economy ministry intends to end confusion over its interpretation, particularly with regards to what constitutes as imported gas and its origin. The change will also mean the location of the company that is the gas-seller will be taken into consideration rather than the origin of the gas extraction.

Given Poland’s import-infrastructure and geographical location, the previous law was seen by many as particularly problematic. Other than domestic production most Polish gas is sourced from Russia, with the rest delivered from Germany or the Czech Republic.

According to German grid operator GASCADE, in the last year on average 7 million cubic metres/day was nominated for backhaul through the Yamal pipeline from the Polish-German border at Mallnow to the PWP nomination point in Poland.

The much-criticised regulation was established more than 15 years ago and states that a supplier cannot import more than 70% of its gas from one source, although this percentage dropped to 59% in 2015. Only natural gas imported from outside of EU will be subjected to diversification caps after the new regulation comes into force. For such imports, the import cap will remain at 59% until the end of 2018 when it will be lowered to 49% for another 6 years. Karolina Zagrodna



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