Tuesday 17 June 2014
Renegotiation of Yamal Contract?
"We will renegotiate the provisions of the Yamal contract and we expect a significant reduction in the price of gas from the East" - said
Minister of Economy Janusz Piechociński. The possibility of renegotiation concluded by PGNiG and
Gazprom contract (so callled Yamal Contract) will be possible starting from November 2014.
Yamal pipeline (and
management contracts called “Yamal contracts”) is a pipeline which
connects the natural gas deposits in northern Russia with
Western Europe. The pipeline runs
through Russia, Belarus and
Poland to Germany. The entire
pipeline has a length of 4196 km, of which 3 thousand km in Russia, Belarus
575 km and 680 km
in Poland. The map below presents the actual pipeline as
well as its plans of development (source: wikipedia).
The Yamal pipeline project began in 1992, Poland signed
the first agreement with
Russia in 1993, the latest version comes from 2010.
Yamal contract is Polish-Russian Agreement on the supply of natural gas to Poland. The latest version, from 2010, introduced increase the supply of gas from the existing 7.45 billion m3 to 10 billion m3 per year, whilst maintaining the existing duration of the contract until 2022.
At the moment, Polish Minister of Economy pointed out that recent years has changed the situation around gas in Europe. The Minister also noted that over the past several months, it turned out that in the spot contracts - short-term in Europe - you can get better rates than long-term contracts.
Yamal contract is Polish-Russian Agreement on the supply of natural gas to Poland. The latest version, from 2010, introduced increase the supply of gas from the existing 7.45 billion m3 to 10 billion m3 per year, whilst maintaining the existing duration of the contract until 2022.
At the moment, Polish Minister of Economy pointed out that recent years has changed the situation around gas in Europe. The Minister also noted that over the past several months, it turned out that in the spot contracts - short-term in Europe - you can get better rates than long-term contracts.
The minister points out: “Long-term contracts were concluded before
the crisis, when everyone assumed
that the price of energy will
increase and it will be a market of vendors. And
as a result of the crisis, the economic slowdown in Europe and an increase in energy efficiency, we have a market ruled
by customers “.
Furthermore, it has been observed that countries that agreed to higher
level of supply (as for example Germany) have lower prices, while those who
committed to buy less (like Poland) were given different, higher price.
Piechociński pointed out that his main
argument is that Poland
is a stable consumer of Russian gas and solid contributor. "It is not
acceptable so as to have a price higher than the European average.
Especially because Poland is closer to
the gas fields, so the transmission
costs are lower" .
It is a very wise move of the Minister of Economy, as the long-term
contracts should be revised froperiodically. Situations exacerbates the
fact that there is a possibility of
problems in the supply of gas (due
to the conflict Russia - Ukraine),
information about the capabilities of
the external gas supply at the beginning
of 2015 (completion LNG gas delivery point in
Swinoujscie) and extensive works on the
exploration of shale gas - thanks to those activities, Poland
has definitely more varied portfolio and has a
better field for negotiations.
Based on the article from: Rzeczpospilita (section:
Ekonomia )
Pictures:
Yamal pipeline: http://pl.wikipedia.org/wiki/Gazoci%C4%85g_Jamalski#mediaviewer/Plik:RF_NG_pipestoEU.gif
Minister Piechocinski: http://www.worldcoal.org/extract/wp-content/uploads/2013/06/janusz-piechocinski.jpg
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