Polish PGNiG said it has won from Gazprom arbitration for $ 1.5 billion

Polish PGNiG said it has won from Gazprom arbitration by a $ 1.5 billion Polish PGNiG said it has won from Gazprom arbitration on $ 1.5 billion
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the Polish gas company PGNiG said that I won from Gazprom arbitration process for $ 1.5 billion, reports “Interfax” with reference to Bloomberg.

“the Victory of PGNiG. The arbitration Tribunal in Stockholm has announced the price reduction of Gazprom’s gas to PGNiG”, – reads the statement of the Polish side.

However, in “Gazprom” have not confirmed the assessment of the compensation. Monday, March 30, “Gazprom export” has received the decision of the Arbitration Tribunal in Stockholm on the case, said the company.

“currently we are studying the decision. Yet to give any estimates amounts of possible payments is premature,” – said in comments “Gazprom export”.

the Court has decided to review the pricing formula for the supply of gas through the pipeline “Yamal-Europe”, with effect from November 2014. Assessment of PGNiG, now she’ll get a refund of the overpayment from “Gazprom” from November 2014 to February 2020 in the amount of $ 1.5 billion. The court has made possible a more direct link pricing formula with gas prices on the European markets that will lead to a significant improvement of the conditions of commercial activities, the statement said PGNiG.

According to PGNIG, the bankruptcy court “changed the pricing formula for gas supplied by “Gazprom” in the framework of the Yamal contract, in particular with regard to its direct connection with the quotations of natural gas to European energy market”. “The adoption of the amended pricing formula will mean for PGNiG significant improvement in trading activities due to the greater consistency between indexation of prices, affecting the cost of gas imports, and market pricing of gas sales,” – said in a statement, quoted by RIA “Novosti”.

PGNiG initiated an arbitration against PJSC “Gazprom” and “Gazprom export” in 2015, with a requirement to revise the price of natural gas supplied to Poland under the contract of September 25, 1996. He was for the supply of 10 billion cubic meters of gas per year, the minimum annual contract quantity – 8.7 billion cubic meters per year. The contract is valid until 2022.

June 29, 2018, the Tribunal issued an interim decision on the case. The Polish company said that the arbitrators recognized the right of PGNiG to demand price reduction in the contract for the supply of Russian gas via the gas pipeline Yamal – Europe. But in “Gazprom export” have noticed that the Tribunal did not agree with the proposed Polish company way price change and the price formula.

in addition, the Tribunal did not agree with the arguments of the PGNiG that the only relevant factor for pricing in long term gas supply contracts is the price of hubs. “Gazprom export” did not agree with the findings of the Tribunal about the Tribunal’s authority to change the price formula in its sole discretion and on 1 October 2018 appealed to the Swedish national court with the requirement about cancellation of the first arbitral award of June 29, 2018.

Poland consumes 15 billion cubic meters of gas per year. A third of the quantity it produces independently in their territory, and the rest imports. The main supplier of gas to Poland – the Russian “Gazprom” on the basis of a long-term contract with which the country can annually buy 10.2 billion cubic meters of gas.

In 2012, the parties agreed to reduce gas prices by 10%. In 2015, PGNiG sued Gazprom in an arbitration court in Stockholm on the case of reduction of prices on gas, as, according to Warsaw, the cost of gas in the current agreement is too high and does not correspond to the situation in the European energy market.

the Polish Authorities stated that the country seeks to find a replacement for the gas supplies from Russia until 2022, when expire long-term contracts with Gazprom. Among the possible alternatives – increase in volumes of purchase by Poland of liquefied natural gas that comes into the country from Qatar and the United States. Another possibility is the construction of a gas pipeline, Baltic Pipe, which the project would connect Poland with the Norwegian shelf through Denmark.