February 19, 2010
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Home / News / Today's Headlines / Poland-Russia Gas Deal Generates Losses

16.02.2010

Poland-Russia Gas Deal Generates Losses

Poland lost almost 3 billion zlotys (almost 1 billion euro) between 2006-2009 on a gas deal with Russia.

 This is a result of botched negotiations conducted by the Polish PGNiG gas monopoly with the Russian energy giant Gazprom in 2006. Poland had to accept an average 10-11 percent rise in the price of gas imported from Russia. It was also forced to pay an extra charge, resulting from price hikes, on gas bought a year before, which amounted to almost 100,000 US dollars.

 By the end of 2005, PGNiG began negotiations with Gazprom on a short term gas delivery contract, supplementing the main “Yamal” gas deal. The Polish firm was faced with a serious gas shortages due to protracted frosty winter, which threatened cuts in gas supplies to industrial plants. Russia used this opportunity and demanded changes in the “Yamal” deal in return. It was then that factors stabilizing the price of gas delivered by Russia were abandoned.

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