Gas impasse

Polish Oil and Gas (PGNiG) is holding talks in Moscow with Rosukrenergo on new conditions for sending gas to Poland. The current contract, which sends gas from Central Asia to Poland and provides the country with around a fifth of its annual gas demand, expires on December 31.

Right now the two parties are negotiating the price for 1,000 cubic meters of gas. Representatives of the Polish company claim that the proposed prices are unacceptable. Rumors have it that the Russians want Poland to pay over $300 (zł.899) per 1,000 cubic meters of gas, while the widely accepted price range in Europe varies between $280-310 (zł.839-929). According to unofficial information, until now PGNiG has paid Rosukrenergo about $240-250 per cubic meter (zł.719-749).

Last Tuesday Ukrainian gas transfer company Lvivtransgaz said it would halt gas transfers to Poland because Rosukrenergo hasn't resolved the issue of gas transport through the Polish-Ukrainian border. In the end the gas flow wasn't interrupted, but analysts see this situation as pressure to soften the Polish side before the next round of talks.

At the same time, PGNiG is looking for alternative gas sources. The company announced last week that it has submitted two offers for tenders to begin exploration works in Egypt. According to a company statement: "PGNiG is interested in two concession blocks located in the western part of the Egyptian desert." PGNiG has qualified for the second phase of a similar tender in Libya.