Page 14 - FSUOGM Week 47

FSUOGM PERFORMANCE FSUOGM

PGNiG earnings soar on court

win against Gazprom

POLAND EARNINGS at Polish state gas supplier PGNiG trading position by creating a stronger link
soared in the first nine months of 2020, on the between the costs of gas purchased east of
Gazprom paid PGNiG back of an arbitration award that required Rus- Poland and gas prices in European markets,”
$1.5bn and amended sia’s Gazprom to pay the company $1.5bn and PGNiG president Pawel Majewski said. “It is not
the pricing formula in amend its pricing formula for gas. the money returned by Gazprom that underlines
their long-term supply PGNiG’s EBITDA surged 168% year on year the strength of our group.”
contract. to PLN10.69bn ($2.84bn), while its EBIT leapt PGNiG generated 77% of its EBITDA from
up 346% to PLN8.24bn. Revenues fell by 7% to its trading and storage segment, while its distri-
PLN29.65bn, but this was more than offset by a bution, exploration and production and gener-
31% fall in operating expenses to PLN19.19bn. ation businesses accounted for 14%, 7% and 5%
The key factor behind these gains was the respectively.
ruling by the Stockholm arbitration tribunal Having only just put an end to their last dis-
in March that brought an end to a five-year dis- pute, PGNiG and Gazprom are now embroiled
pute between PGNiG and its main gas supplier in yet another disagreement over prices. The
Gazprom. The latter was ordered to pay $1.5bn Yamal contract allows either side to request price
to the Polish firm for previously charging too talks every three years if they feel prices do not
much for its gas. It remitted this sum during the reflect market conditions. PGNiG took advan-
summer. tage of this clause earlier this month, requesting
Gazprom also amended the pricing formula a renegotiation. Gazprom later retaliated with a
in the pair’s long-term supply agreement, known request for a price hike.
as the Yamal contract, making it more reflective The Yamal contract became active in 1996
of hub price trends. Even excluding the settle- and covers the annual sale of 10bn cubic metres
ment sum and other one-off items, PGNiG’s per year of gas to Poland, with a take-or-pay
EBITDA was still 32% higher at PLN5.5bn clause requiring PGNiG to pay for at least 8.6
thanks to the price amendment. Its EBIT was bcm. It is due to run out at the end of 2022, after
meanwhile up by 51% at PLN3.06bn. which point Poland hopes to replace Russian
“Winning the arbitration proceedings has imports with extra LNG and later piped supplies
helped PGNiG to significantly improve its from Norway. ™

P14 www. NEWSBASE .com Week 47 25•November•2020