Poland to Renegotiate LNG Contract with Qatar
The Polish government will attempt to get a price reduction in the long-term LNG contract with Qatargas says the country's Treasury Minister.
“The prices of gas back in 2009, 2010 were definitely higher than today, including those based on oil-indexed pricing formulas. We are of the opinion that this must be verified and changed, as that we pay a market price, and not the one that was on the long-term markets several years ago”, said Mikolaj Budzanowski.
The contract was signed in July 2009 by the governments of Poland and Qatar. Under the 20-years deal, Qatargas is to deliver 1m tons (1.4 bcm) of LNG per year.
The detailed terms of the contract remain confidential. However, according to reports in the Polish media, the pricing method is similar to the formula used by Gazprom and that the future prices of gas from Qatar will be near to or even higher than prices of the gas imported from Russia.
Speaking in Parliament, Minister Budzanowski disclosed that the "price in the Qatar contract fluctuates between 340 and 380 USD/mcm, while average prices set by our Eastern neighbor are at the level 400-500 USD/mcm”.
Budzanowski was also answering MPs’ concerns about delay in the Swinoujscie terminal construction. The mid-2014 date of completion has been put into question by bankruptcies of contractors due to losses on highway and stadium projects.
MPs asked whether the state-controlled gas firm PGNiG, will be obliged to pay for gas even if the terminal is not ready by that time.
The minister continued that the contract states that deliveries are to start not earlier than in July 2014 and not later than in January 2015. The government expects the terminal to become operational by then.
Along with exploration for shale gas, the first LNG terminal in Poland, in Swinoujscie, with ability to supply more than one third of Poland's annual natural gas requirements, is a part of efforts to reduce dependence of gas imports from Russia.
The initial capacity of up to 5bcm per year can be extended to 7.5 billion cubic meters.
Currently Poland consumes around 14 bcm of gas annually, of which 9 bcm is imported from Russia.
This month Polish gas firm PGNiG, paying the highest price among large European importers, finally reached an agreement with Gazprom. According to the government, the cut in the long-term contract with Gazprom exceeds 15 percent.