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Gazprom in talks to retroactively raise price of gas sold to Poland

Warsaw, Poland – Russian gas giant Gazprom announced it was in talks with Poland’s state-run gas company PGNiG to retroactively raise the price of gas supplied to Poland since 2017, as the pricing dispute between the two countries continues.

“In line with the contract, the companies are in talks to revise gas prices dating back to 2017. Gazprom Export believes there are enough grounds to revise the price upwards,” the Russian company said.

The announcement comes after PGNiG won a case against Gazprom over its long-term contract for gas imports at an international arbitration tribunal in March, which ruled that Gazprom must pay its Polish counterpart about $1.5 billion (1.3 billion euros) by July 1.

But if Gazprom reaches an agreement with PGNiG to raise prices retroactively that would reduce the bill it owes the Polish company. Gazprom also said it was appealing the international arbitration court’s ruling.

PGNiG reacted in an emailed statement saying only that the Yamal contract, which dates back to the 1990s, allows for price renegotiation every three years.

The Lakhta Center, Gazprom’s new St. Petersburg headquarters, is the tallest building in Europe. Credit: Gazprom

No more Russian gas after 2022

With the country currently importing most of its natural gas from Russia, Poland has long wanted to wean itself off Russian fuel, repeatedly stating that it would not buy anymore Russian gas after 2022, when its long-term supply deal with Gazprom will end.

Last month, gas transit via the Yamal-Europe pipeline, which carries Russian gas through Belarus and Poland to Germany, was brought down to zero after another transit deal between Poland and Russia was not renewed by Warsaw.

Poland’s decades-old dependence on Russian energy supplies makes it vulnerable to political pressure from the Kremlin.

The new inter-European Baltic Pipe Project, which will link gas fields on the Norwegian shelf in the North Sea to the Polish coast, has been hailed by Warsaw as a way of reducing its dependence on Moscow.

“If we are talking about full diversification of gas supplies to Poland, if we are talking about full independence of Poland as a recipient from Russia, this is the milestone on the road to this non-dependence”, said Poland’s president, Andrzej Duda, about the project, at a press conference last month.

Under the impulse of then Polish Prime Minister Donald Tusk, Poland has aimed to gradually reduce its reliance on Gazprom since 2013.

The 1,200-kilometer long Nord Stream 2 pipeline has been designed by Moscow to bypass overland routes crossing through Ukraine and Poland. Credit: Radio Free Europe

Nord Stream 2 nears completion

Meanwhile, Russia’s controversial Nord Stream 2 pipeline, designed by Moscow to increase gas supplies to Europe through the Baltic Sea by bypassing overland routes crossing through Ukraine and Poland, is nearing completion. But Russia still sees the possibility of Brussels imposing new retroactive restrictions against the pipeline project.

Nord Stream 2, which Poland says would make Europe too reliant on Russia for energy, was just weeks away from completion in 2019, before U.S. sanctions threatened to halt work on the last remaining section in Danish waters.

“Nord Stream 2 is a project that Poland has criticized from the very beginning, as it does not ensure energy security and makes Europe dependent on deliveries of one supplier, namely Gazprom”, Poland’s Foreign Minister Jacek Czaputowicz said at a joint press conference with Germany’s Heiko Maas, who is currently on a visit to Warsaw.

According to the Polish minister, the pipeline also threatens Central and Eastern Europe whose transit role will be diminished.

Russian President Vladimir Putin said in January during a press conference with German Chancellor Angela Merkel that he hoped the project would be completed in early 2021 at the latest.

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