Poland Wins Gas Price Dispute

Poland has won its argument with Gazprom in the Stockholm arbitration tribunal, meaning it is entitled to a $1.5bn refund for past over-payments for its Russian gas, the state gas company PGNiG said March 30. And from now on it will pay western European market prices, not oil-indexed prices, following the setting of a new formula.

“The Arbitral Tribunal has sided with PGNiG, thus confirming that the price of gas in the Yamal contract failed to reflect the price level on the market and was overstated,” said CEO Jerzy Kwiecinski. “The tribunal changed the calculation formula for the price of the Russian gas by tying it very closely to the price level on the European market, which for PGNiG means a huge improvement of the terms of our gas imports.” 

The award will be binding on both parties with retroactive force, dating back to November 2014: the date on which PGNiG sent its contract price review request to Gazprom. PGNiG took its complaint to the Stockholm arbitration tribunal in February 2016.

“Diversification of gas supplies remains our constant priority, therefore we plan to use the funds we will recover from Gazprom to purchase new hydrocarbons deposits”, said Kwiecinski and added: “We will also invest in new business areas related to the integration of the domestic heat market and the development of a zero-emission energy source system.”

The positive outcome had been expected by the previous head of PGNiG, Piotr Wozniak, last year. The contract expires in a year or two.