Polish PGNIG Needs to 'Rebalance Gas Imports'
Polish state run gas group PGNiG has declared that diversifying its import portfolio beyond 2022 is one of its strategic objectives.
In a strategy presentation on April 4, it listed procuring gas “at prices reflecting the current market situation in Europe” as one of its goals – declaring this meant renegotiating of price terms under its Gazprom (Yamal) and Qatargas LNG contracts. PGNiG filed an arbitration claim against Gazprom two months ago; a ruling is due in mid-2017.
Among other goals, PGNiG listed placing more of its gas into foreign markets, while limiting the decline in sales on its home market arising from market liberalisation.
PGNiG admitted that its current mix was meant to cover Poland’s entire gas demand – which in 2015 was 16.5bn m3 -- and that there is “a risk of imbalance in the group’s gas portfolio” if its Polish gas market share is eroded further.
It acknowledged that “differences in pricing formulas between PGNiG and its competitors entail a risk of pricing pressure.” Its 10.2bn m3/y Gazprom and 1.4bn m3/y Qatargas import contracts are oil-indexed and run to 2022 and 2035 respectively.
PGNiG also will “assess the rationale for developing international LNG trading within the PGNiG Group.” Many similar-sized European firms like Austria’s OMV/Econgas and Danish Dong already have an LNG trading unit.
PGNiG said that spot gas prices in Germany and other European markets during 2014-15 declined by over 40%, enabling rivals to import gas at below the contractual prices that it pays for imports.
PGNiG also faces regulatory pressure in that it is required by the Polish regulator to sell at least 55% of its high-methane gas on commodity exchanges or other regulated markets.
Mark Smedley