September 17, 2021

Poland, a fierce critic of Russian energy projects, buys more and more Russian natural gas.

During the second and third quarters of the year, Poland continues to import 900 million cubic meters of Russian natural gas each month. This volume corresponds to the maximum level of supply under the agreement with Russian gas monopoly Gazprom. At the same time, Polish authorities have earned the reputation of being one of the most persistent and fierce critics of Russian projects in the energy industry.

How Poland voluntarily bought gas at a higher price.

“From January to August 2021, Gazprom increased its gas supplies to Poland by 12%,” he said. Interfax The summary of the eight months of the current year refers to Gazprom’s message on production and supply.

Interestingly, Poland’s state-owned gas company PGNiG mediated against Gazprom last year and succeeded in trying to revise the price formula. According to representatives of the Polish company, the court made it possible to establish a direct link between the price formula and gas prices in European markets, which will significantly improve the conditions of commercial activity.

Gas prices were very low last year. For example:

  • In May 2020, gas prices at the TTF Hub fell almost twice as much as at the end of March of the same year – from $ 80 to $ 46-47 per 1,000 cubic meters;
  • The price of natural gas at the Boomgarten Center is about 62 62.62 per thousand cubic meters.

This price level did not cover Gazprom’s transportation and tax costs, let alone any profits.

And, of course, against such a backdrop, PGNiG’s victory seemed extremely lucrative. However, gas prices in Europe have risen to 600 600 per thousand cubic meters of gas. The average cost of a one-day deal at TTF Hub in the Netherlands for August is 3 533.

If the police had not disagreed on the price and the terms of supply, the price would have been less than 26 260 per thousand cubic meters. Still, Poland is reluctant to buy natural gas at European market prices, and it is up to the poles to decide.

Poland unwilling to sign agreement with Gazprom

Poland also monitors liquefied natural gas (LNG), although all its free volumes have been going to Asia for months, where gas prices are much higher than in Europe. For some strange reason, the United States sells gas to Asian buyers, and has no desire to supply Poland with a “molecule of freedom” (as former Secretary of State Mike Pompeo put it).

In August 2021, Poland reduced its use of liquefied natural gas by 29%. August 2020. However, the average NG LNG imports for 2021 are still showing a five percent increase to 2020 levels.

By 2022, the so-called Yamal Agreement is in force, which allows Poland to receive 10 billion cubic meters of gas annually from Russia. In Poland, they refused to renew the agreement to compensate for the shortfall in gas supply through LNG supply and Norwegian shelf production.

Again, freedom is free: if the police think it is profitable for them to pay for gas twice, then who can stop it?

Leave a Reply

Your email address will not be published. Required fields are marked *