Polish Incumbent Extends Grupa Azoty Contract
Polish state-run PGNiG has extended its sales contracts with five companies owned by another state company, fertiliser manufacturer Grupa Azoty, until September 30, 2022, it said May 24.
The contracts, concluded on June 21, 2017, would otherwise have expired at the end of this September. The total value of what will now be four-year contracts, from October 1, 2018 to the end of September 2022, is estimated at over zloty 8bn ($2bn). The original contracts covered at least 4.5bn m³ in total.
The extended gas price is linked to the market and provides the buyer with security of supply, which is crucial for the continuity of production of fertilizer and chemical products, PGNiG said. There is no hub in Poland but the seller may use the German NGC hub as a basis price.
"For the next two years Grupa Azoty will use the very competitive market conditions for gas purchases negotiated between our companies in 2017. We put a lot of effort into working out a contract model that would be satisfactory for both parties throughout the supplying period. It is an honor and great satisfaction that Grupa Azoty – the strategic recipient of gas in Poland – has chosen PGNiG as its key supplier and that our companies will continue to co-operate for the development of the chemical sector in Poland," said PGNiG supply head Maciej Wozniak.