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. Last Updated: 07/27/2016

Poland Cuts Gazprom Deliveries


Vedomosti

Deputy Prime Minister Viktor Khristenko

WARSAW, Poland -- Poland and Russia signed a deal Wednesday that allows Warsaw to buy about a third less of natural gas than previously agreed over the next 17 years, part of the former communist country's efforts to cut its dependence on Russian gas.

"We are threatened neither by gas oversupply nor shortage," Deputy Prime Minister Marek Pol said after signing the agreement with his Russian counterpart, Viktor Khristenko.

"We also won't need to pay for gas we are not using."

Poland estimates that cutting gas deliveries from Gazprom, the world's largest natural gas producer, by 34.5 percent between 2003 and 2020 to 143.4 billion cubic meters will save it more than $5 billion.

In return, Poland has agreed to import gas from Gazprom for two more years beyond the end of the current contract in 2020. Poland also has the option until 2009 to increase or reduce supplies by 10 percent.

"This document not only guarantees delivery of Russian gas to Poland, but also long-term gas transit to Western Europe, and in that sense is a joint contribution to energy security in the 21st century," Khristenko said.

The agreement also provides for building three new compressor stations in Poland to increase the capacity of the Yamal-1 Russia-to-Germany gas pipeline.

Poland, citing the need to secure its energy supplies, is trying to diversify its energy sources. The government is to decide later this year on a plan for the Danish oil and gas company DONG to build an undersea pipeline to Poland.

Ratification of a 2001 deal by Norway's Statoil to supply Poland with 74 billion cubic meters of gas between 2008 and 2004 has also been delayed until the end of 2003.

Poland has previously overestimated the amount of natural gas it needs to import, and this, combined with a drop in demand for gas, means the country has been paying for more gas from Russia than it uses.

(AP, Reuters)