Polish Briefing 21 February, 2018 9:00 am   
COMMENTS: Mateusz Gibała

Polish Briefing: Poles want to diversify sources of gas supply to pay less and feel safer

What goes on in Poland on the 21st of February.

Poles want to diversify sources of gas supply to pay less and feel safer

In the opinion of the vast majority of Poles, Poland should diversify the sources of gas supplies as soon as possible. In their opinion, breaking the dependence from one supplier will significantly improve our security and allow lowering the price of the raw material. These are the most important conclusions from the GFK Polonia survey, “Energy Security of Poland 2017 – gas market”.

– The results of the study confirm that the policy implemented by the Ministry of Energy to diversify natural gas supply sources and the strategy for building Poland’s energy security meet with understanding of Poles and meet their expectations. The actions consistently undertaken by our government in cooperation with companies operating in the sector bring tangible results and lead to an increase in the energy independence of our country – says energy minister Krzysztof Tchórzewski.

– One of the elements of the policy pursued by Poland in the area of ​​diversification is the development of gas infrastructure – including extension of the LNG terminal in Świnoujście and the implementation of the Baltic Pipe project. In addition, independence from the dominant gas supplier is a guarantee of competitive raw material prices. Increased gas consumption in the energy sector will also contribute to reducing the emission of the Polish economy and thus will be an effective tool to fight smog – emphasizes Deputy Minister Michał Kurtyka responsible in the Ministry of Energy, among others for the gas sector.

As many as 93 percent of respondents believe that Poland should import gas from various directions and sources, and thus become independent from one supplier. Currently, about 70 percent of imported gas goes to Poland from Russia, which according to the majority of respondents (75 percent) is not favorable for our country. Hence the large support for the construction of the Baltic Pipe pipeline, which is to enable the transfer of the raw material extracted in Norway to Poland. 90 percent of respondents are convinced about the fact that it is an investment that will improve energy security.

End of the dispute over the gas pipelines of Ukraine in February. The shadow of Nord Stream 2 falls on arbitrage

According to the Platts agency, the dispute between the Ukrainian Naftogaz and the Russian Gazprom may be resolved in February. The future of the gas sector in Ukraine will depend on it, and with it, the stability of Poland’s eastern neighbor who lost Crimea and struggles with Russian aggression in the east of the country.

The dispute concerns a gas contract from 2009. The court has already ruled on the provisions on gas supplies to Ukraine, which imposed the obligation to buy 4 billion cubic meters annually from Gazprom until 2019 on Ukrainian Naftogaz, and for a Russian company – to revise the price in favor of Ukrainians and to free it from the value of oil in favor of the German stock exchange index.
It is to settle the transit contract case by the end of February. This decision will depend on how much gas will flow in the future through Ukrainian gas pipelines, and therefore also their profitability in the face of modernization expectations and attractiveness for foreign investors, whose number is more than ten according to the Ukrainian side’s declaration.

In addition, Naftogaz is demanding $ 16 billion from Gazprom for “underpayment” for transmission via Ukraine. If the Ukrainians win in court, they will have more funds for gas purchases, which may be a problem if Western aid is stopped as a result of slowed sector reforms expected by the lenders, such as the International Monetary Fund and the European Bank for Reconstruction and Development. The fate of reforms also depends on the ruling of the arbitration court, because the failure of Naftogaz in court may even mean the bankruptcy of the company against the escalating demands of Gazprom, and this will be an independent operator of gas pipelines.