Polish Briefing 11 August, 2022 8:00 am   

Polish Briefing: New Norwegian gas contracts in Poland soon? | 1.5 percent of Polish GDP in energy subsidies

Coal. Photo: Freepik Coal. Photo: Freepik

What goes in Poland on 11th of August.

New Norwegian gas contracts in Poland soon?

Poland is to have new gas contracts for deliveries from Norway through the Baltic Pipe gas pipeline which is to be ready in autumn 2022.

When it comes to contracting, it is primarily about deliveries from January next year onwards, but I cannot and do not want to comment on the PGNiG negotiations. I can only reveal that they are advanced. Their effects will probably be announced soon – says Anna Łukaszewska-Trzeciakowska, Deputy Minister of Climate and Environment in an interview for – However, I am concerned some entities are pushing for speeding the negotiations up at the expense of worse contract terms for Polish companies. They are using fear, for instance when it was alleged that Tauron would soon turn off the Jaworzno Power Plant, because it has run out of coal. Such news reverberates, meanwhile we are negotiating with our partners.

When I hear that the Baltic Pipe contracts have not been concluded, that there will be no gas in the Baltic Pipe, I have the impression that there is an element of a business game, in which some members willingly enter. It is no secret how negotiations under the pressure of one’s own community end. These are too big contracts to talk about publicly at the negotiation stage – states Łukaszewska-Trzeciakowska.

Baltic Pipe is to be ready in autumn 2022. The official opening ceremony is scheduled for the 27th of September. The pipe is expected to reach a full capacity of 10 billion cubic meters a year at the end of 2022. Polish state-owned gas company PGNiG has 3 bcm of annual production on the Norwegian shelf, and has a deal with Orsted for 6.4 bcm between 1st of January 2023 and 1st October 2028. New deals are being negotiated.

1.5 percent of Polish GDP in energy subsidies

CitiBank has estimated that the energy subsidies will cost around 1.5 percent of Poland’s GDP. The reduction of natural gas prices will cost around PLN 23 billion, while the subsidies for electricity will cost PLN 13 billion. Together will coal allowances, which will cost PLN 11 billion, the total for these subsidies will reach 1.5 percent of Poland’s GDP.