GAS 19 June, 2020 10:00 am   

“Dumb Polacks” don’t want cheap gas from Russia (COLUMN)

Writing responses to articles on “dumb Polacks” who don’t want cheap gas from Russia has become rather tedious. Despite that, these rebuttals need to be reiterated, especially when this kind of propaganda is published by a prestigious paper, such as the Financial Times – writes Wojciech Jakóbik, editor in chief at

Vitaly Yermakov from the Oxford Institute for Energy Studies, former employee of Sberbank, wrote for the Financial Times that “Poland seems to have sacrificed commercial reality on the altar of political desire, as it has effectively cut off one of its cheaper and cleaner sources of supply while also reducing its bargaining position.” It is his take on Poland’s decision not to renew the Yamal contract. Yermakov claims that Poland wants to stop buying Russian gas altogether because of a “fixation on “, which translates into the physical elimination of Russian gas from the market through “building expensive alternative infrastructure”. According to the author, the Baltic Pipe’s economic benefits are questionable because of the existing gas route between Norway and Germany. In Yermakov ‘s opinion PGNiG’s victory over Gazprom at the arbitration court showed that reducing the price of Russian blue fuel was possible without investments in large diversification infrastructure.

First, Poland has not officially declared it won’t buy gas from Russia after 2022 once the unfavorable Yamal contract is up. The decision not to prolong the agreement was made because of business reasons. This contract is the most expensive and the least flexible offer on the Polish market, especially considering the growing competition and increasing supply of the blue fuel in Europe.

Second, Poles won the arbitration case after a five year battle against Gazprom. During that time, as well as before, Russians sprung many unpleasant surprises, including limiting gas supply due to ‘technical reasons’ in 2017. Fortune was more favorable to Poland than to Ukraine, which had to send bailiffs to Gazprom’s premises across the EU to seize the company’s assets to recover the money Kiev won in its arbitration case against the Russian giant. We were also more fortunate than Belarussians who are now threatened by Russian media that their gas deliveries will be stopped as of July, if Minsk doesn’t withdraw its demands to lower gas prices and doesn’t pay back a non-existent debt. Coincidentally Russians remembered about the debt during the current price negotiations. It is worth reminding once again why Poland had to go to arbitration. In 2014 Warsaw asked Gazprom to lower its gas prices in Poland as the situation on the market suggested such a decision should be made. However, Russians did not budge. This statement of fact is the starting point when analyzing whether all of Gazprom’s decisions are driven by commercial reasons, or whether some of them are an element of the Kremlin’s policy, which is sometimes pursued even to the detriment of the company.

Third, a completely opposite point to Yermakov’s could be made. Perhaps Gazprom’s civilized attitude after it lost the case to PGNiG, which was completely different to how the company treats Ukraine and Belarus, was possible thanks to the expanded gas infrastructure that finally gave Poles freedom of choice, and thanks to new market conditions that favor diversification – a drop in demand, record-high gas reserves, cheap alternatives such as LNG from the US.

Fourth, the dispute with Gazprom has not ended yet. Russians appealed against the arbitration ruling and argue they can count for it to be, at least partially, changed in their favor. The long history of disputes with Russians tells us to expect they will remain difficult until the end of the Yamal contract in 2022.

Fifth, the concerns about spending money on hydrocarbons from Russia are not caused only by business reasons, i.e., the fact that the Yamal contract was the most expensive offer available to Poles. There are also concerns regarding foreign policy and security that are rightfully voiced not only by Warsaw, but also by green organizations in Western Europe. Every dollar paid to Gazprom or Rosneft means more money for Putin’s tanks that are destroying Ukraine and Syria.

Gazprom discourages its clients itself. They are not dumb for wanting to be independent of the company. They would be dumb if they didn’t learn from their past mistakes. The Yamal contract is a relic that will soon be a thing of the past. It would be great if the same happened to articles on “dumb Polacks” who don’t want Russian gas. However, I’m afraid that won’t happen.