Polish Briefing: Ukraine is waiting with the gas pipeline and gas supplies from Poland

What goes on in Poland on the 26th of February.

Profitability of deliveries

BiznesAlert.pl found that there is still a long way to go to sign a long-term contract between PGNiG-Naftogaz and the construction of the Poland-Ukraine gas pipeline on the Ukrainian side.

Naftogaz’s representatives argue that natural gas supplies from Poland to Ukraine could increase under the condition of an attractive offer, which is better at a gas connection with Slovakia. They add that deliveries from Poland are important for the sake of security of supply and will be taken into account in the case of its threat until the price of supplies is attractive. They admit that, for now, the new re-export of LNG by Poland is not encouraging enough.

However, after 2022, PGNiG’s portfolio is to be subject to changes due to the start of deliveries of US liquefied gas from long-term and Norwegian contracts through the planned Baltic Pipe gas pipeline. Then Naftogaz may receive a better offer. The company’s representatives admit that the competitiveness of the Polish market is limited by the Act on mandatory reserves of natural gas, which is not available in Slovakia.

However, if it is possible to improve the attractiveness of supplies from Poland to the Ukrainian market, Naftogaz could bring in even 2,5 billion cubic meters annually depending on the supply portfolio from other directions. Poles already deliver almost 2 billion cubic meters of natural gas annually to Ukraine via ERU Trading.

Co-financing of the Poland-Ukraine gas pipeline

Ukrainians do not intend to build a gas connection between Poland and Ukraine. Representatives of Ukrtransgaz argue that Poland or the European Commission should co-finance a project, implementation of which depends on the construction of the section on the Ukrainian territory. Naftogaz does not consider the project as a priority due to attractive alternatives, eg deliveries through Slovakia.

BiznesAlert.pl business partners in the Polish gas sector remind, however, that the position of Ukrainians may be negotiable.