WARSAW: Poland’s biggest gas company PGNiG plans to sell natural gas on foreign markets and wants to renegotiate its long-term supply contracts to reduce import costs, it said in a strategy update released late on Monday. Poland consumes around 16 billion cubic meters of gas annually. Most of it comes from Russia, as state-run PGNiG depends on a long-term gas supply contract with Gazprom, the so called Yamal contract, binding until 2022.
PGNiG is now struggling to secure alternative supplies after that date. Poland’s first liquefied gas terminal (LNG), at the Baltic sea, will take the first commercial shipments in July and the country is also planning a pipeline to Norway. The company said that due to the sharp fall in oil and gas prices on global markets it will try to renegotiate the price terms in its long-term gas supply contracts – the one with Gazprom and another with Qatargas.
“Securing terms of gas procurement that would allow PGNiG to purchase gas at prices reflecting the current market situation in Europe (renegotiation of the price terms under the Yamal and Qatar contracts)” is one PGNiG’s strategic goals, it said. To balance its gas portfolio amid a liberalizing Polish gas market PGNiG said it plans to place some gas on the international markets.
PGNiG and Gazprom already started renegotiating their contract in 2014. The Polish company buys up to 10.2 bcm of gas annually from the Russian firm. The deal with Quatargas assumes gas deliveries of 1.5 bcm annually via the terminal for 20 years starting from 2014 when the facility was initially set to open.
In its updated strategy PGNiG hiked its 2022 EBITDA forecast to 7.4 billion zlotys ($1.98 billion) from 7 billion zlotys seen earlier. The company sees investment at 40-50 billion zlotys by 2022, with net debt to EBITDA ratio seen below 2.0. It said it would continue to pay out up to 50 percent of the group’s profit as dividend.
