Demand for gas in Poland will double by 2030 as gas-fuelled power generation will increase, Michal Szubski, CEO of Polish gas monopoly PGNiG, told the Vedomosti newspaper.
Poland currently consumes 13 billion-14 billion cubic meters of gas per year.
PGNiG at the beginning of November initiated arbitration proceedings in order to review the price of gas in contracts with Gazprom. Szubski said he hoped the company would get a better price deal than now if it continues to buy large volumes of gas from Gazprom.
He said Gazprom currently supplied 60% of Poland’s gas, Poland itself produced 30% and other suppliers provided the other 10% under various contracts. "And we’d like to modify that a little, i.e. to be getting at most 50% from Gazprom, continue to produce 30% ourselves and increase other sources to 20%. This does not mean Gazprom will be selling less," he said.
Regarding on-going price negotiations with Gazprom, Szubski said his company wanted to lower the basic prices and introduce a spot element to the contract.
He said the price formula for future liquefied gas supplies was also partially coupled to oil prices, as in long-term contracts with Gazprom, but this is "shorter" than in the contract with Gazprom at three months compared with nine [the time lag in price coupling]. "It is of course hard to compare these formulas. But we think that in the long term, LNG will be cheaper," Szubski said.
Szubski also said he was sure shale gas was environmentally friendly. "Independent institutes carry out studies at every stage of exploration. We’ve carried out hydrofracturing at two wells, and analyzed the water before and after, and it remained clean. As for the hydrofracturing process, this has been done the world over for 40 years now in coal production, at oil field and at traditional gas fields. It’s the same substances, the same chemicals. The difference is that more powerful and more precise fracturing is used to produce shale gas," he said.
Szubski said he thought the forecasts and prospects for share gas production in Poland would be aired in the second half of 2012.
Following a lengthy process, and intervention by the EC, Russia and Poland signed documents on gas supplies in October 2010, stipulating that in 2010 Gazprom will supply Poland with 9.7 bcm of gas (of Russian or other origin), 10.5 bcm in 2011, and 11 bcm in 2012-2037. The prior protocol provided for 8 bcm per year until 2014 and 9 bcm thereafter.
Russia did not grant but promised Poland discounts for gas supplied in excess of contracted volumes.
