Oil Report

Poland's PGNiG has no plans to adjust gas contracts to changing demand

WARSAW, March 25 (Reuters) - Poland’s dominant gas firm, PGNiG, said it is too early to assess the impact of the coronavirus epidemic on domestic gas demand and so it does not plan to start any talks aimed at modifying its gas import contracts.

European gas demand could fall more than 4% over the next two months as commercial and industrial activity is depressed as more countries lock down to tackle the spread of the virus, consultancy Rystad Energy said last week.

Poland has developed many gas infrastructure projects based on the assumptions that demand for gas will rise from the current 19 billion cubic metres (bcm) annually as it will be using it as a transitional fuel when it diverts from coal.

It plans to expand its liquefied natural gas (LNG) terminal in Swinoujscie on the Baltic Sea and build a gas link to Norway, projects which were designed to help Poland reduce its reliance on Russian gas.

To be able to stop buying gas from Gazprom after 2022, when a long-term deal with the Russian gas giant expires, PGNiG also signed long-term contracts on LNG supplies with Qatar and the United States.

“At the moment it is definitely too early to assess the impact of the current situation on the demand for gas in Poland. PGNiG has different types of options (contractual, access to infrastructure), which allow to react in a flexible way to the changing demand,” PGNiG said in an e-mailed statement.

“Currently the company does not conduct any talks in this respect and for the time being does not plan such talks.” (Reporting by Agnieszka Barteczko Editing by Robert Birsel)