Page 12 - FSUOGM Week 34 2022

FSUOGM NEWS IN BRIEF FSUOGM

Poland’s Azoty Group more versus August 2021. and ethnic-Turk Movement for Rights
Although former ruling party Gerb
The price rally owes to Russia’s cutting
suspends fertilizer supplies to Europe, which is desperate and Freedoms (DPS) claim they are pro-
Western, the two parties avoid taking
to fill storage ahead of winter to ease a
production as high gas looming gas crisis brought about by Russia’s openly anti-Russian positions and also
waging war against Ukraine and the West’s
indicate they would renew the country’s
prices sting sanctions on the Kremlin. energy dependence on Russia.
While in indirect conflict over Moscow’s
One of Europe's biggest fertiliser producers, war in Ukraine, Europe remains much Pro-Western Democratic Bulgaria said
Warsaw-listed Polish chemicals group dependent on Russian gas supplies, cutting in a statement on August 23 that it strongly
Azoty and its – also listed – unit Pulawy or reducing which is now expected to opposes the government's decision, calling
suspended and reduced production of some bring a major economic slowdown, if not it treason.
products, including nitrogen fertilisers and recession, in the EU. “The caretaker government is selling
ammonia due to skyrocketing prices of gas, EU leaders keep accusing Russia of Bulgaria, relentlessly attempting to return
a key component in the production process, manipulating supplies to stoke an economic the country back to dependency on the
the companies said on August 23. and energy crisis in the cold season to Kremlin. With the conscious 'missing'
“Due to record prices for natural gas, weaken Europe’s support for fighting of opportunities to secure gas deliveries
the main production feedstock used by Ukraine. from other sources, including already
Grupa Azoty … the company decided that Grupa Azoty’s stock fell 5% to PLN34.2 contracted ones, Donev’s cabinet is using
as of August 23, it will temporarily shut (€7.17) on the Warsaw Stock Exchange on the most effective weapon – the fear and
down its nitrogen fertilizer, caprolactam August 23. Pulawy’s share price dropped manipulation – to persuade the community
and polyamide 6 production units,” the 2.18% to PLN71.8. of the inevitability of the return to
company said in a market filing. Gazprom,” Democratic Bulgaria said in a
Pulawy said that it would cut its statement.
ammonia output to “about 10%” of Bulgarian politicians It also accused Donev's government of
production capacity. lying and having “the obvious plan to return
“Although there are no problems with deeply divided over start of to Russian gas dependency”.
the availability of gas, the current situation “Donev’s cabinet has proven itself as the
in the gas market, which determines the negotiations with Gazprom main weapon of the Kremlin in the hybrid
profitability of production activities, is war in Bulgaria and a vanguard in [Russian
extraordinary and completely beyond the Bulgarian politicians are deeply divided President Vladimir] Putin's war with the
control of [the group], and could not have after Prime Minister Gulub Donev's democratic world,” the statement reads.
been predicted,” the two companies said in caretaker government said that it has It also added that the prices of Russian
similarly-worded statements. no other option but to start talks with gas are not the lowest as claimed by the
"There is no doubt that such large Russia’s Gazprom on the resumption of gas caretaker government, and that negotiations
reduction of output must affect Azoty's deliveries. on renewed supplies would mean that
results in a very significant way. It is A day earlier, the government announced Bulgaria will lose its chances to seek
unknown yet how long [the stoppage] will it will start negotiations with Gazprom, payment of penalties by Gazprom after the
take, whether it is a question of one week, after refusing to accept six tankers of US halt of deliveries in April.
month or quarter," Lukasz Prokopiuk, an liquified natural gas (LNG) contracted by Change Continues did not issue an
analyst with DM BOS brokerage told the the previous government of Kiril Petkov. official position but its members have also
state newswire PAP. The interim government also intends to commented that the caretaker government's
Such low production coupled with high negotiate with Azerbaijan for increased decision is against Bulgaria’s interests.
fixed costs will generate negative EBITDA supplies, as agreed by Petkov in the last days Experts noted that Gazprom’s price
on a daily basis. In July, output was higher, of his government. would be higher compared to that of the
but if the stoppage continues until mid- or The position of political parties towards Azeri or the US gas, as well as that the
end-September an EBITDA loss in Q3 will renewed talks with Gazprom is seen as a chances of these negotiations to succeed are
be possible. dividing line between parties ahead of the slim anyway.
Meanwhile, another Polish fertiliser October 2 snap general election. On the other hand, the BSP welcomed
maker, Anwil - which is owned by energy On one side are positioned reformist the government’s decision, saying it
giant PKN Orlen - also said on August Change Continues, led by Petkov and has been insisting on the renewal of
23 that it would suspend production of former finance minister Assen Vassilev, and negotiations since April.
nitrogen fertilisers due to high prices of gas. the Democratic Bulgaria. They have been “In April we forecast the coming crisis
The news will affect Polish farmers, who insisting that Bulgaria should not return with the gas supplies and its consequences.
are one of the key voter constituencies for to Russia's orbit and should not discuss Then we stated a clear position that we
the ruling Law and Justice (PiS) party. new deliveries with Gazprom. The Russian support today as well: the negotiations with
“Farmers may be uneasy about [the company stopped supplies to Bulgaria at Gazprom must be restored,” the BSP said in
cut in production] but there are well over the end of April, although its contract with a statement.
100,000 tonnes of fertilisers in Grupa the country does not expire until the end of It added that this would guarantee
Azoty’s warehouses … There will be 2022. stability, security and predictability for the
enough for the autumn season,” Agriculture On the other side stand the political economy and households. The BSP said it
Minister Henryk Kowalczyk told PAP. parties that openly or unofficially support supports the diversification of gas supplies
Dutch TTF Gas Futures hovered around a new contract with Gazprom and stronger but currently it cannot secure the needed
€260 per megawatt-hour (MWh) for Russian influence. They include the 3bn cubic metres of gas the country needs
September deliveries on August 23, up from Bulgarian Socialist Party (BSP), pro-Russian annually..
below €90 in late May and nearly ten times Bulgarian Ascend and Vazrazhdane.

P12 www. NEWSBASE .com Week 34 24•August•2022