Poland, Russia Ink Long-awaited Gas Agreement, EU Approval Still Needed

Poland and Russia signed the long-awaited intergovernmental natural gas deal last Friday, not waiting for the final okay from the European Committee, which had repeatedly demanded the submission of the final draft of the contract for approval.

The agreement which increases annual gas supplies to Poland by some 2 billion cubic meters annually was signed between Polish deputy PM and Economy Minister Waldemar Pawlak and Russian deputy PM Igor Sechin.

"The agreement is balanced and creates good conditions for Polish and Russian [gas] companies' cooperation," Pawlak told a news conference. "Thanks to the agreement gas will be delivered to consumers, enterprises and chemical sector companies without any problems."

The agreement opened the way to signing the annex to the Yamal pipeline agreement between Polish gas giant PGNiG and Russian firms Gazprom and Gazprom Export.

The annex already received necessary corporate approvals, PGNiG said in a market filing.

The annex assumes (as indicated by PGNiG):
- increasing gas supplies volume to Poland in years 2010-2022 as follows: (1) in 2010 - 9.03 bln cubic meters [bcm] according to the Polish norm; (2) 2011 - 9.77 bcm according to the Polish norm; (3) 2012-2022 - 10.24 bcm;

- abolition of the clause prohibiting gas re-export to third party countries without Gaz Export's consent;

- preferential price discounts in years 2010-2014, which, if used, should bring USD 200-250 mln savings;

The estimated average annual contract value at current level of oil-derived products stands at some 8.5 billion zlotys, PGNiG also said.

The European Commission will be presented the fragments of the Polish-Russian gas contract that are of interest to it, this week, Prime Minister Donald Tusk said in Brussels last Thursday.

The gas contract should not raise any doubts of the EC, as the contract's fragment on the Yamal gas pipeline operator deal between EuRoPol Gaz and Gaz-System, which was negotiated with the EC's help, is written entirely in line with the EC's expectations, Tusk said.

The European Commissioner for Energy Gunther Oettinger is concerned about Poland's haste with the finalization of the contract and disappointed that he has not been invited to the signing of the contract, Polska The Times writes citing Polish MEP, Prof. Lena Kolarska-Bobinska, speaking on Oettinger's behalf.