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Poland, Russia near long term gas deal

Poland, Russia near long term gas deal

Write: Osmar [2011-05-20]
The European Union said Poland is likely to face natural gas shortages later this year as a result of delays in signing a long-term gas supply deal with Russia.

The EU held talks Saturday with Poland and Russia on adjusting a new gas supply contract between the countries to align it with the bloc's laws.
The agreement on increasing Russian gas delivery to Poland and its transit to Germany through the Yamal pipeline was negotiated last year but has not been signed due to worries that it is incompatible with European Union laws.

Poland reached a preliminary agreement with Russian gas export monopoly Gazprom in January.

The new deal will raise annual deliveries of gas to Poland to as much as 10.2 billion cubic meters from about 7.4 bcm.

The increase will cover a supply gap after one of the country's transit sources halted last year and will help secure supply from the Yamal pipeline.

The deal covers 10 billion cubic metres of Russian gas a year for Poland until 2037, as well as gas flowing onwards to the rest of Europe through the Yamal pipeline.

The Commission has said the deal must respect EU rules which say that the pipeline must not be monoplised by Poland and Russian gas companies PGNiG and Gazprom.

Poland imports about 65-70% of the 14 billion cubic metres of its annual gas consumption from Russia, a dependence that worries many in the EU's biggest ex-communist state.

Poland's own production of gas is 4.3 bcm and its storage capacity is about 1.6 bcm. The country can also import almost 1 bcm of gas from neighboring Germany.