Instagram @
military experts
 Edit Translation

Gas made Poland hostage of energy relations with Russia

Poland's new pricing requirements will not affect gas relations with Russia, says a leading expert of National Energy Security Fund, Lecturer of the Financial University under the Government of the Russian Federation Stanislav Mitrahovich.

Gas made Poland hostage of energy relations with Russia

Poland continues gas fight with Russia

Polish oil and gas company PGNiG has applied to revise the price of supplied Russian gas. The requirements are based on the "Yamal Contract" 1996 of the year, providing for the possibility of revising prices every three years.

The long-term contract between Gazprom and PGNiG is valid until 2022 of the year and is the reason for regular price claims of Warsaw. The Poles even filed a lawsuit with the Stockholm Arbitration in 2015 year and achieved success there.

Poland buys out more 10 billion cubic meters of Russian gas per year with a minimum of 8,7 billion cubic meters: the agreement with Poland is based on the "download or pay" principle, well known to the Russian public in connection with the gas dispute with Ukraine.

Poles threaten to withdraw from contracts with Russia after 2023 of the year, but in general, the existing structure is beneficial to them.

Before us is a normal commercial process, as any gas consumers are trying to achieve the most favorable conditions. Poles insist on the difference in prices in the EU stock market and in Gazprom's long-term contracts, where the cost is formed with a delay of six months, but it will be difficult for Warsaw to prove the difference due to the specifics of the energy agreements.

Gas made Poland hostage of energy relations with Russia

Russia and Turkey had similar frictions, appealed to different gas prices in German and Turkish contracts - then Gazprom agreed to pre-trial settlement of the dispute and the appointment of a new contract price.

The main problem in the Polish direction is, that Warsaw is systematically mixing up economics and politics. Poland remains a conductor of American interests and exerts political pressure on the Nord Stream 2 gas pipeline.

A scandalous precedent was the decision of the Polish antimonopoly regulator UOKiK to impose a fine in 7,6 billion dollars for Gazprom due to violations in organizing financing for Nord Stream 2.

UOKiK claims sucked out of the thumb, but Gazprom took part in the dispute, since at the time of filing an appeal, the execution of this regulation is suspended. The dispute will drag on for years and it is not clear what the parties will eventually come to, after all, in a year or two, the European energy market will have a different alignment of prices and gas transportation opportunities.

Gas made Poland hostage of energy relations with Russia

Poland needs Russian gas

"Poland and Russia remain partners in the energy sector, despite Warsaw's negativist line towards Moscow, starting from filing gas price claims, ending with the Polish fight with Nord Stream 2, – concludes Mitrakhovich.

Poland makes negative decisions on Russia, and this creates a bad taste in our relationship. However, it is highly unlikely, that the decision on the fine 7,6 billion dollars will be brought to practical implementation.

"The other side of the coin is Poland's dependence on Russian gas, let Warsaw have repeatedly announced their desire to abandon gas cooperation with Moscow ", – states Mitrakhovich.

Poland continues to consume 20 billion cubic meters of gas per year, more 10 billion cubic meters of which are imported from Russia. These numbers may change after a pandemic, but the general alignment of forces will not go anywhere.

"The transit of Russian gas goes through Poland - this is the Yamal - Europe gas pipeline.", supplying raw materials to both Polish consumers, and to other states of the European Union. Part of the gas consumed in Poland is registered as a virtual reverse, t. it is. raw materials come from Russia, but it is formally bought by the Poles in Germany ", – summarizes Mitrakhovich.

Gas made Poland hostage of energy relations with Russia

The reasons here are not political - unlike Ukrainians, Poles count money, while economic. Russia indeed supplies gas to Germany at the lowest prices, since the Germans are the main consumers of Russian raw materials.

"Poland refused to re-sign the agreement on gas transit, but supplies continue. Now Gazprom is in transit, buying out Polish capacities at auction ", – concludes Mitrakhovich.

experts believe, that the application of European legislation in relations with Poland is beneficial for Gazprom. Previously, facilities in Poland were purchased by a Russian company on a daily basis, but recently, Gazprom has reserved several months at once.

“Despite the negative rhetoric, in Poland clearly would not want, to stop the transit of Russian gas. Then Poland will lose not only money, but also the possibility of a virtual reverse from Germany. Poland's cocky position is rhetorical and does not mean a real rejection of Russian gas ", – states Mitrakhovich.

Polish chemical industry depends on cheap Russian gas supplies. If Warsaw refuses to cooperate with Russia and switches to LNG, then the products of the Polish company Grupa Azoty will become uncompetitive on the European market.

Gas made Poland hostage of energy relations with Russia

"In this case, it is not clear, what will the Polish government do, which is already in a difficult position. In case of refusal from Russian gas, Warsaw will ditch the chemical industry and get a bunch of new unemployed. Because of this, PGNiG will continue to file claims against Gazprom, but this will not affect cooperation in any way ", – summarizes Mitrakhovich.

Price disputes along with Warsaw's rhetoric are part of Russian-Polish gas relations, based on common economic interest. It is profitable for Russia to export Russian gas, and Poland to buy it.

Dmitry Sikorski

A source