Polish gas shippers may give up licences to avoid storage costs

Withdrawing licences that allow shippers to import gas into Poland could be the only way to avoid paying for obligatory storage and survive financial struggles, several traders at Polish independent gas companies told ICIS.

Comments from traders followed the recent approval of a law that will ban shippers who comply with Poland’s strict gas trading rules to use cross-border capacity for commercial reasons by the country’s president.

The law means shippers who comply with the country’s strict gas trading rules by keeping legally-obligated volume in storage abroad, will not be able to use associated cross-border capacity for commercial reasons.

The new rules, set to come into force in October this year, are expected to damage the market’s competitiveness and threaten independent gas companies in the country.

State-owned PGNiG is currently the biggest seller on the market, providing nearly 75% of all available supply. Other sellers include German head-quartered Handen, Finish Fortum and Polish company Hermes, among other independent gas companies.

The number of gas sellers active in Poland has grown in recent years, as companies traded spreads between Polish hub prices and prices on the German hub GASPOOL, to import and resell the typically cheaper gas from abroad. Under the new law, such activity will no longer be allowed.

Loopholes

Traders who purchased cross-border capacity before the latest law was passed, have identified a part of the law that could help them avoid paying storage fees, but will mean they will have to give away their cross-border trading licences.

Article 7 of the document, which can be found here , suggests that the obligation to keep gas in storage will not cover firms which until now have been importing gas into Poland, if the company withdraws its import licence and stops all cross-border trading by 5 August this year.

“It [the clause] could save us lots of money [ by not having to pay for storage in Poland] but it means the market will be hard for smaller companies in 2018 unless PGNiG, by then the only seller, decides to base its prices on fundamentals without creating too much premium to other markets,” a trader from one of Poland’s independent gas companies said.

Another trader went as far as saying that using the loophole in the law could mean a make or break for some gas companies.

“Without concession you won’t be able to import at all in the future. That means that maybe you won’t face bankruptcy but … you are basically asked to leave the market,” the trader said. karolina.zagrodna@icis.com