PKN Orlen Turns from PGNiG with New Contracts

Polish refiner PKN Orlen has announced today that it will diversify its supply from Polish state-owned supplier PGNiG with the signing of five short-term supply contracts.

In a statement released on its website today, PKN Orlen said that it would source gas from ENOI SpA, Shell Energy Europe Limited, Egesa Grupa Energetyczna SA, Vattenfall Energy Trading GmbH and Mercuria Energy Trading.  

"In the past year, in addition to the basic contract, we had two alternative natural gas suppliers, so that we could minimize the effects of supply constraints in the winter season," Jacek Krawiec, President of the Management Board of PKN Orlen, said in the statement.

"This year we want to increase purchases from alternative sources, which will undoubtedly strengthen the security of supply to the PKN Orlen."

The company expects that the new suppliers could provide up to 35 per cent of PKN Orlen's gas needs, he continued. No further details were given as to the length of the contracts or the volume of supply.

The signing of the contracts is part of a move to increase competition in the Polish market away from the dominant supplier, PGNiG, under pressure from the European Union. 

In the same statement today, PKN Orlen also announced that it has been approved to trade natural gas on the European Energy Exchange (EEX) in Leipzig, Germany. The company said the approval would only open up new opportunities for diversification of suppliers, while also allowing it to take advantage of price differences between the Polish and European markets.