Poland Profits from Ukraine's Demand
Polish state-run incumbent PGNiG re-exported 1bn m³ of gas to Ukraine between August 2016 and December 2017, it said January 10.
That suggests a fairly steady export rate over the 17 months as it exported 700mn m³ in 2017 alone. It cited this large number as proof of its "increasing role on the gas market of central and eastern Europe."
Poland's gas sales to Ukraine however are a fairly new thing, as Ukraine only began diversifying when it stopped importing gas from Russia in late 2015. Since then, it has become an attractive solution for companies who overcontracted gas and need an economic outlet for it.
The Poland-Ukraine interconnector is running at maximum now, so only by increasing cross-border capacity can Poland's exports rise: virtual reverse flow through another link between the two countries is not possible as Gazprom does not allow others to use the capacity it has contracted, according to PGNiG. It does this by withholding the shipper codes, as it has in the case of the Ukraine-Slovakia 'Brotherhood' pipeline operated by Eustream - with only one smaller, but upgraded, Eustream pipe enabled to pipe flows in opposite direction into Ukraine.
PGNiG achieved its export result by virtue of its "proficient and flexible price policy,” said vice-president Maciej Wozniak. “Our supplies are attractive, because they are not only competitive, but also reliable and secure which is of a great importance to Ukraine. The portfolio of gas in our offer is well diversified: it comes from our domestic production in Poland and from various import directions. In the first three quarters of 2017, 12% of our total import came via LNG terminal in Swinoujscie mainly from Qatar, Norway and the US. We do not plan to import natural gas from Russia after 2022 – the expiration date of the current long-term contract with Gazprom. For PGNiG, energy security is a priority and it means diversified supplies of gas from different geographical directions at competitive prices, while supplies from Gazprom do not fulfill these conditions,” he said.
In October 2017 PGNiG signed framework agreements with the Ukrainian gas system operator Ukrtransgaz for gas storage and transmission pipeline capacities in Ukraine. This has opened new trade opportunities for PGNiG, it also said.
Polish state gas grid operator Gaz-System has pledged to build over 2,000 km of north-south transmission pipelines in Poland over the next decade to enable more LNG to be regasified and flowed into central Europe, reducing the region's Russian dependency. Gaz-System also is co-investing in BalticPipe, enabling direct Norwegian gas imports via Denmark by 2022, and has contingency plans for a floating LNG import terminal near Gdansk in addition to its already agreed plan to expand the Swinoujscie LNG import terminal by half from 5bn m3/yr now to 7.5bn m3/yr. Not everyone is enthused though: former RWE executive Wolfgang Peters, who took Gazprom to arbitration in 2012-13 and won, last year accused Poland's Gaz-System of building more and more expensive pipelines instead of "embracing the market".