Page 12 - FSUOGM Week 07 2022

FSUOGM PROJECTS & COMPANIES FSUOGM

PGNiG asks for dismissal of Gazprom’s

price revision demand

POLAND POLAND’S state-controlled oil and gas com- price after the Russian company’s requests to do
pany PGNiG said on February 11 that it would so, issued in 2017 and 2020, elicited no response
It is the latest turn in ask for dismissal of the Russian state-owned gas from PGNiG.
a tit-for-tat saga over giant Gazprom’s demand to retroactively revise Gazprom is looking to regain some of the
pricing between the two the price of gas under a long-term supply con- ground it had lost after the Polish company had
companies. tract expiring this year. earlier managed to win price concessions. In
The demand, which Gazprom served in a 2020, the Stockholm tribunal ordered Gazprom
notice to the arbitration tribunal in Stockholm to pay $1.5bn to PGNiG for previously over-
in January, should be “be dismissed as formally charging for the supplies.
inadmissible or, alternatively, as unfounded The two companies entered their current
and without merit”, PGNiG said in a market contract back in 1996, covering 10bn cubic
filing. metres (bcm) of annual gas supply. The con-
The Russian company’s notice is yet another tract, which is partially oil-indexed, includes a
in the tit-for-tat saga of pricing that has involved take-or-pay clause that means PGNiG must pay
the two companies for years now, with political for at least 8.7 bcm per year of gas even if it does
undertones. not take that much.
Poland has long said that Gazprom’s role far The contract runs out at the end of 2022 and
exceeds that of a purely sales-motivated com- PGNiG has repeatedly said it will not renew the
mercial company and that Gazprom is in fact a deal. It hopes to replace Russian gas with LNG,
tool of Russia’s strong-arm foreign policy. mainly from the US and Qatar, as well as Nor-
Gazprom wants the Stockholm tribunal to wegian gas via the Baltic Pipe going operational
review a retroactive increase of the contract later this year. ™

NEWS IN BRIEF

Uzbekistan to ramp up gas Consumers in Azerbaijan BP increases gas

production to meet growing spend over $107mn on production from Shah Deniz

demand gasoline and diesel fuel in field by 27% in 2021

Uzbekistan plans to ramp up its natural gas January In 2021, BP-Azerbaijan produced 23
production in 2022 by 4% to 56.3bn cubic bcm of gas from the Shah Deniz field
metres (bcm), the energy ministry said on Fuel consumers in Azerbaijan purchased in the Azerbaijani sector of the Caspian
February 11. motor gasoline and diesel fuel for a total Sea, which is 27.1% more than in 2020,
The government is also looking to move of AZN182.4mn ($107.3mn at the current the company's press service said in a
ahead with an increase in production of exchange rate) in January 2022, according statement. Shah Deniz also produced
liquefied petroleum gas (LPG) this year to to the State Statistics Committee data approximately 34mn barrels of condensate
0.832mn tonnes from 0.645mn tonnes last released on February 11. (4mn tonnes) in 2021, up 17.2% from
year. In total, of the volume of retail trade 2020. "Currently, the field's production
Uzbekneftegaz, meanwhile, is this year turnover in Azerbaijan during the reporting capacity is approximately 72 mcm per day
to expand the volume of its prospective period, revenues from sales of motor or over 26 bcm per year," the company said
reserves by 35 bcm of natural gas and 1.0mn gasoline and diesel fuel amounted to 5%. The costs of the Shah Deniz consortium
tonnes of liquid hydrocarbons through Compared to January 2021, revenue from in 2021 as part of the development of this
exploration work at 20 new fields. the sale of gasoline and diesel fuel to field amounted to $2.68bn (an increase
Uzbekistan used to export gas to Russia consumers increased by 6%, according to of 38%). At the same time, the operating
and China, but domestic consumption the agency. costs of the project exceeded $2bn, and
growth has outpaced production. The Fuel consumers in Azerbaijan purchased capital costs amounted to $680mn. The
government halted exports and instead motor gasoline and diesel fuel for a bulk of the costs fell on work within the
began buying gas from Russia's Gazprom. total of AZN2.5bn ($1.47bn) in 2021. framework of Stage-2 of the development
At the opening of the Uzbekistan At present, the retail price of Premium of the Shah Deniz field.
gas-to-liquids plant, named UZGTL, Euro-95 gasoline in the domestic market of The company also reported that
at the end of 2021, President Shavkat Azerbaijan is 1.6 manats per 1 litre, Super during the reporting year, through the
Mirziyoyev said that instead of selling gas Euro-98 is 1.8 manats/litre, AI-92 is 1 South Caucasus Pipeline (SKTM or
abroad, gas would be processed locally "so manat per litre, and diesel fuel is 0.8 manats Baku-Tbilisi-Erzurum), transportation
that the people would benefit." per litre. averaged 48.5mcm of gas per day (in 2020
- 33.8mcm per day). Operating costs for

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