Gazprom seeks higher gas prices for Poland through Stockholm court

On January 14, OOO Gazprom Export and PJSC Gazprom applied to international arbitration in Stockholm with a proposal to retrospectively revise the price terms of the 1996 gas purchase and sale contract with the Polish company PGNiG. It was reported as Polishand the Russian side.

Earlier it was reported that Gazprom Export sent a request to PGNiG to revise the price of natural gas supplied under the contract from November 1, 2017. In accordance with the terms of the contract, three years later, Gazprom Export acquired a new right to demand the next revision of the price from November 1, 2020, transmits Interfax.

“Taking into account that commercial negotiations to revise the price in accordance with the requirements of Gazprom Export did not lead to an agreement, the Russian company, in accordance with the contractual terms, referred these disputes to the arbitration tribunal,” emphasizes Gazprom Export.

PGNiG recalls that Gazprom’s bids to increase the price were submitted in response to the buyer’s requests for price reductions. The 1996 agreement ends in 2022, and the Polish authorities announced several years ago that the country would not renew it.

At present, Gazprom Export and PJSC Gazprom continue to seek in the Svea Court of Appeal (Stockholm) the annulment of the arbitral award issued on March 30, 2020, which retrospectively changed the contract price from November 1, 2014. According to the court decision, the price of the contract was tied to market indicators, and not to the price of oil, as before. In 2021, this mechanism became very inconvenient for PGNiG, as the price of gas on the spot rose sharply, while the oil-indexed price of long-term contracts rose much more slowly. In October 2020, PGNiG again asked Gazprom to lower the price.

According to the arbitration rules, PGNiG must submit its response to Gazprom’s application within 30 days.

PGNiG has previously challenged Gazprom’s access to the OPAL gas pipeline (the eastern land branch of Nord Stream), and has also argued in court against the exclusion of the Nord Stream 2 gas pipeline, which is a Gazprom project, from the EU Gas Directive. In addition, the Polish antimonopoly regulator fined the participants in the Nord Stream 2 project by almost $8 billion.

Poland also demanded that the European Commission investigate the activities of Gazprom, which is suspected of manipulating the European market.