PGNiG wants to sign new Norwegian gas deal in 2004

Dec 11, 2003 01:00 AM

Polish gas monopolist PGNiG wants to sign a deal in 2004 with Norway to buy 1 bn-2 bn cm of gas from 2007, PGNiG's president said after his company and Norway's Statoil put a long-term, long-dormant 74 bn cm deal out of its misery.
"We are conducting talks with Norwegians and we'll want to sign a deal next year allowing for purchase 1 bn-2 bn cm of natural gas from Norway as of 2007," PGNiG president Marek Kossowski told MPs during a parliamentary Treasury committee sitting.

Kossowski stressed that gas from Norway would allow Poland, which currently relies on gas from Russia, to diversify its gas supplies. Norwegian state-owned Statoil and PGNiG finally killed off on December 2 the 74 bn cm, 16-year gas supply deal first signed in 2001 but long rated unworkable.
For the Norwegians, annual gas levels were insufficient to justify the expenditure needed to build a new pipeline on the Baltic Sea floor whereas the Poles balked at prices and were in danger of having contracted too much gas after long-term consumption projections were cut.

This time round, Kossowski pledged to try to secure price levels closer to those it pays for Russian natural gas, which now accounts for some 60 % of all gas consumed in Poland and upwards of 90 % of imports.
"We want to reach price levels comparable with the prices we pay for Russian gas," Kossowski said. "This is possible, although talks are very hard," he said.

Kossowski added that PGNiG intends to increase domestic production of natural gas to 6 bn cm in 2008-10 while supplies from the Russian Yamal contract will be at the level of 8 bn cm. Poland will consume some 12 bn cm of gas in 2003, marking an increase of 1 bn cm against a year earlier.
Kossowski said that this growth came mainly due to larger demand from the chemical sector. Out of the 12 bn cm, 7 bn cm will be imported from Russia, 4 bn cm will be produced locally and 1 bn cm will be imported from western markets.

Source: Interfax Information Services
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