Polish Briefing 24 July, 2017 9:00 am   
COMMENTS: Mateusz Gibała

Polish Briefing: EU court rejected Poland’s applications. Orlen’s good performance

What goes on in Poland on the 24th of July

EU court rejected Poland’s applications

“The President of the General Court rejects the applications for a stay of execution of the Commission’s decision that 50% of the transport capacities of the OPAL gas pipeline are to be subject to a bidding procedure,” said the Court’s press release.

The Court also stated that “applicants have failed to show that the harm suffered as a result of the contested decision is serious and irreparable and therefore that decision remains applicable until delivery of the judgments on its lawfulness.”

Poland, PGNiG and PGNiG Supply & Trading applied to the General Court to suspend the EC’s decision from 2016. Poland and PGNiG argued that increasing OPAL’s capacity would decrease gas transmission via the Yamal-Europe and Brotherhood pipelines and thus “will threaten gas supply security to Poland or will be detrimental to competition.”

Poland fights against Nord Stream 2

In Straslund in northern Germany, a Polish delegation justified their concerns about Nord Stream 2 construction to German officials. According to the Polish Radio’s unofficial sources Poland demands that the gas pipeline be buried below the seabed. The Nord Stream 2 consortium does not intend to comply.

A participant of the meeting in Straslung told the Polish Radio that Poland presented specific arguments for burying the pipeline underground. The representatives of the Szczecin and Świnoujście Seaports Authority explained that placing the pipelines on the seabed where Nord Stream 2 will cross with the northern entrance to the Polish harbors will make it impossible to expand the container terminal in Świnoujście. The Polish representatives presented the plans to develop the Świnoujście harbor to which ships with deep draught will need access. The development of the port depends on putting the pipeline beneath the seabed.

Act on renewables will normalize the market

“The Sejm introduced new legal regulations that will end the so-called oversupply of green certificates. It will normalize the situation on the market of these securities. The existing regulations had flaws, such as the fixed level of the alternative fee. Energa positively assesses the new regulations,” says the concern from Gdańsk.

On 20 July the Sejm adopted the amendment of the Act on renewable energy sources. Currently it is being processed by the Senate. Energa, a leading energy group in renewable energy production, believes the amendment is welcome. “It is an important element that normalizes the green certificate market,” the company believes.

Orlen’s good performance 

The Orlen Group’s net profit earned by the shareholders of the dominant entity dropped in the second half of 2017 to PLN 1.54 bn from PLN 1.61 bn last year and was a little lower than the average market forecasts at PLN 1.58 bn. Orlen’s expected refinery margin in the third quarter of 2017 will increase to USD 7.3 per barrel from USD 6.9 in the second quarter. The Brent/Urals differential will drop to USD 0.8 per barrel from USD 1.5 per barrel in the previous quarter.

The EBITDA profit was PLN 2.7 bn. Analysts expected it would be PLN 2.45 bn. The operating profit dropped to PLN 2.12 bn from PLN 2.49 bn year on year. The consensus assumed an PLN 1.92 bn EBIT.

“The success mostly results from a 10% year on year increase in total sales volume in all segments and favorable macroeconomic conditions,” the company commented.