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Saturday, March 24, 2018

Poland tries again to bring down prices for Russian gas

“Poland has decided not to renew the contract for the supply of Russian gas” – such titles flooded on Tuesday the European media. If, as many do, not to read beyond the title, it would seem that the Russian gas will cease to arrive in Poland tomorrow. In fact it is not. Moreover, this is the rare case when Poland can understand.

Immediately we emphasize: we are talking about the year 2022 – the date on which expires the current contract with Gazprom. On the complete refusal to renegotiate nobody in Poland spoke. Even official statements on this account has not yet been.

“Russian gas will always be for Europe the cheapest and most affordable”

Organized by Reuters of the conference, which was devoted to investments in Eastern Europe, representative of the Polish government on the development of strategic energy infrastructure Piotr Naimski, in particular, said: “We will strive for a situation in which a long-term contract thing of the past”. “If the price of Russian gas is quite competitive, we do not exclude the possibility of its acquisition, but certainly not under long-term agreements”, – quotes TASS Naimski.

Alternatively Naimski called in the first place the natural gas that flows through the liquefied natural gas terminal (LNG), built in the seaside town of świnoujście. The terminal was built a long time – the contract was signed in 2009, planned to open in June 2014, but to build a facility in time failed. As a 20-year contract, concluded by the Polish state company PGNiG with Qatar Qatargas, as well as “Gazprom”, formulated on the principle of “take or pay”, the Polish side had to compensate for the Qatar incurred due to the delay damages. In 2014, the cost of Qatari gas to Poland was about two times more Russian – $ 650 per thousand cubic meters against $ 380 under the contract with Gazprom.

As Ukraine makes Russian gas evropeyskimi scandal, which received the spy continued, VZGLYAD understand in detail. To recognize the fact that the project was a failure, and the blame for this lies entirely on the limitations of the motifs (actually, the motive is just one – Russophobia), Warsaw could not until now.

Common needs of Poland in Gaza at present amounts to 14 billion cubic meters per year. From Qatar comes in świnoujście 1.5 billion, the maximum capacity is 5 billion cubic meters per year. Thus, one Qatari gas to Poland “fed” will not.

Therefore, Warsaw is also counting on the project Baltic Pipe, providing for the merger of the Polish, Danish and Norwegian infrastructure gettransportinfo. Its design capacity is about 10 billion cubic meters, meaning it would almost completely cover the needs of Poland without gas purchases from Russia.

The problem is that the “Baltic pipe” (translated as Baltic Pipe) have often attempted to run, but to no avail. Poland and Denmark have begun to negotiate the project in 2001, but stopped due to the economic inexpediency. Then the project tried to revive in 2007, but re-turned in 2009. Again began to discuss in 2010 but stopped in 2011.

Now the chances of the construction of the pipeline became a little more: in November 2015, the European Council, under the leadership of former Polish Prime Minister Donald Tusk took the Baltic Pipe to the category of PCI (Project of Common Interest, project of community interests) and has allocated additional funding to “study the feasibility of connection of pipeline systems in Scandinavia and Poland”.

Between the “study of possibilities for implementation and the implementation usually goes a long way promotion which can take decades. So, to say that by 2022 Poland will obtain the necessary number of Norwegian or any other alternative of gas is not necessary.

Accordingly, refusal from the Russian gas in 2022 or later – it is not. Just Poland is its economic and geopolitical game, and in this case Warsaw can understand (that lately is not often). The “take or pay”, as well as long-term contracts designed to protect the interests of the supplier and the buyer wish to abandon them completely of course. Another thing is that in other conditions, the gas producers will not be able to put into operation new fields, to do the exploration, to build pipelines or LNG plants. The gas itself is cheap. But to find it, produce and deliver consumer – expensive.

Actually, that’s why many regions of Russia, located along the leading in Europe high-pressure gas, still not completely gasified. The cost of the project is such that either the population will not be able to pay on the declared tariff or the supplier will bear the permanent losses.

But the buyer of all these problems the supplier, roughly speaking, “damn”. Therefore, diversifying sources of gas, Poland is seeking a one – price reduction. It is clear that cheaper cost neither Gazprom nor any other company in the world to supply gas will not. But to achieve the lowest possible prices in such hands would be easier.

In order to be less dependent on the same in Poland, Gazprom, respectively, increases the number of customers: if one does not agree to take the stated price, so, take someone else. Therefore, Poland strongly opposed the expansion miniusage its territory “Nord stream”, and equally strongly supported wholeheartedly the struggle of the European Commission against the “South”. No politics, just business. Buyers need to have more suppliers and fewer buyers, producers – exactly the opposite.

To speak now about what will be the price of gas in 2022, what will the political situation in Europe and in the whole world, even about whether to preserve until that time, the European Union, with the full measure of the confidence impossible. The current state of Affairs in the world is not conducive to long-term forecasts.

Therefore, the word Naimski of intent to revise the contract with Gazprom in 2022 no desire to abandon the Russian gas” for a bear does not. It is rather a statement of fact that there will be negotiations on a new contract. Another thing is that, again, Poland upset the project “Northern stream – 2”, and any statements of Polish politicians on the gas issue should be seen in this aspect.

Gazprom in this situation is to continue to lead the game – to agree on a maximum diversification of supplies and to build the LNG plants, enabling greater mobility in search of buyers. Russian gas will always be for Europe the cheapest and most affordable. But to sell it for a reasonable price, Gazprom should be ready to demonstrate a willingness to sell it at any time in any other part of the world.

It’s called the market.

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