|Will PGNiG manage to sell 1.6 billion cubic meters of gas through the Polish Power Exchange by 2014?|
Courtesy of PGNiG
Poland's natural gas giant PGNiG is in a tight spot, as it is required to sell 1.6 billion cubic meters of gas through the Polish Power Exchange (POLPX) before the end of 2014. If it fails to do so, it is likely to be fined by Poland's energy regulator, URE. However, it already has contracts in place with most of its customers, and could find offloading that large amount of gas extremely difficult. The maximum level of the fine it could face is 15 percent of its annual revenue, translating to about zł.4.3 billion.
“I will not abstain from imposing the fine,” URE head Marek Woszczyk told Dziennik Gazeta Prawna. “Quite the contrary, the issue is a serious one and if necessary, I will not hesitate from following through.” Analysts quoted by the daily however suggested that the fine will be far lower than the maximum level.
From December 2012 up until mid-September, PGNiG attempted to sell 2.5 billion cubic meters of gas on the exchange, but only managed to push through 50 million cubic meters. However, at that time it was under no obligation to trade on the POLPX at all.
But beginning from September 11 this year, the requirements were implemented. It must find a way to sell the gas or pay the financial penalties.
While many companies would quite happily purchase the gas through the exchange, they already have long-term contracts with the gas giant.
“When a similar obligation was enforced on the electric energy market, companies ditched such contracts,” said Ireneusz Łazor, chairman of POLPX, adding that “no such move has been made in the case of gas [trade].”
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