On Monday, PGNiG received an application from Gazprom and Gazpromexport to renegotiate the gas price in the Yamal contract, the company announced. PGNiG noted that the application talks about a renegotiation towards a price increase. The Polish company considers it unjustified.
In the opinion of PGNiG, Gazprom’s request, submitted in response to the earlier renegotiation request, “is unfounded and does not meet the formal requirements described in the Yamal contract, and as a result is ineffective”.
Request for price renegotiation
On November 1, PGNiG announced that it had submitted a request to renegotiate the contractual price of gas supplied by Gazprom in order to lower it.
PGNiG has already applied for a reduction in the contract price from November 1, 2017. Pursuant to the provisions of the contract, each party to the contract may request renegotiation of the price terms for supplies once every three years, if it deems that they do not correspond to the market situation.
Considering that a possible change in the terms of the contract by lowering the contract price as a result of the renegotiation, the commencement of which was announced by the company on November 1, 2017, may enter into force retroactively from November 1, 2017, PGNiG may demand another renegotiation of the contract price from November 1, 2020. Submitting the application by PGNiG starts this process.
The Yamal contract was concluded on September 25, 1996. Pursuant to the provisions of the contract, the parties to the contract are required to submit a declaration on further cooperation after 2022 three years before its expected termination on December 31, 2022.
A year ago, the Management Board of PGNiG, after obtaining the required corporate approvals, submitted to Gazprom Export a declaration of will to end the natural gas purchase and sale contract on December 31, 2022.
Main photo source: Europolgaz