PGNiG Denies Gazprom Price Reduction Proposal

Poland's largest oil and gas producer PGNiG has today denied media reports stating that it had received a proposal for a reduction in gas prices from Russia's Gazprom. PGNiG denies any such proposal for a reduction or change to contractual obligations has taken place.

On Saturday, Polish newspaper Rzeczpospolita reported that an unnamed source, who it said was a representative of IFD Kapital, and anonymous PGNiG sources, said that Gazprom had reached an agreement with several companies, including PGNiG, to reduce gas prices by seven to ten per cent. The reduction would be given in return for buying greater volumes of gas, it was reported.

However, a statement from PGNiG said that no representative of the company had made such a statement.

"PGNiG has not received from Gazprom - in accordance with the contractually agreed procedure - any proposal of changes to the commercial terms of the contract between PGNiG and Gazprom," the statement said.

It added, "No representative of PGNiG has made a statement that would describe the proposed price reduction of 7%-10% reported by the media as attractive."

Rzeczpospolita also reported that Gazprom had reached the same agreement with Dong Energy, RWE, Gas Terra, Shell Energy Europe, E.ON, GWH Gashandel, Centrex and EGL. So far those companies have not responded to the report.

PGNiG has been involved with arbitration with Gazprom since November 2011 in a bid to reduce gas prices. It joins a number of other European companies who have all pushed for a price reduction due to the tying of gas prices to oil prices, which has kept the price for gas higher than the market dictates.