Supplement, Oil & Energy

Poland to end major Russian gas contract by 2022

Published : 16 Nov 2019 07:33 PM | Updated : 07 Sep 2020 02:01 PM

Poland's PGNiG state-owned natural gas company announced on Friday it would not extend a major contract with Russian gas giant Gazprom when it ends in 2022, thanks to its successful diversification of energy sources, report agencies. 

PGNiG said it had notified Gazprom about its "intent to terminate" a long-term so-called Yamal contract from 1996 on "December 31, 2022", according to a company press release.

Two thirds of the gas consumed in Poland, about 10 billion cubic meters, is currently delivered by Russia under the Yamal contract.

An EU and NATO member, Poland has long wanted to wean itself off Russian gas, notably by having opened an LNG terminal on its Baltic coast capable of receiving LNG shipments from the US and the Middle East.

Polish companies have also acquired several gas fields in the North Sea and Warsaw has signed an agreement with Denmark on the construction of a pipeline under the Baltic Sea to ensure deliveries.

A former Soviet satellite state, Poland maintains that reliance on Russian energy supplies makes it vulnerable to political pressure from Moscow. Warsaw has also accused Gazprom of price gouging.

Along with the US, Ukraine and the Baltic states, Poland has lashed out against the Nord Stream 2 pipeline that runs under the Baltic Sea and is set to double shipments of Russian natural gas to Germany, the EU's biggest economy.

They warn that Moscow could seize on Europe's increased reliance on Russian gas to exert political pressure.