Baltic Pipe should bring down gas price levels: expert

PolandIN’s business correspondent expects Poland to be able to lower the price of gas in the domestic market as a result of breaking the Russian monopoly that will be achieved via the construction of the Baltic Pipeline.

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Poland In’s correspondent David Kennedy expects gas prices to fall as a result of Poland’s diversification of gas supplies. Poland is engaged in constructing a pipeline in the Baltic sea to connect it to the North Sea supplies belonging to Norway and in increasing LNG imports from the US and Qatar. At the same time it is note renewing its supplies contract with Russia’s Gazprom.

The Russian contract was a particularly expensive one. It produced the 3rd highest per unit gas price in the world, But now Poland has broken the Russian monopoly and with 25% of the 10 billion cubic metres it is to import via the Baltic Pipe coming from gas fields it has bought from Norway gas prices are expected to move downward.

But Poland IN’s business correspondent does not expect any major breakthrough in shale gas exploration. Poland is already extracting 25 percent of its gas needs from fields in Podkarpacie, but the shale gas revolution never arrived in Poland due to the high costs of extraction and environmental concerns.

PGNiG prospects strong

David Kennedy feels that PGNiG, Poland’s gas conglomerate, is in a strong position due to the fact that it is a natural monopoly, the potential to expand to other Central European markets. Despite its annual profits being down as a result of a fall in the price of gas it has still managed to increase its ratings from the Fitch agency to BBB.

He was not surprised by the fact that the former minister of development and finance Jerzy Kwieciński has been appointed as the new chairman of PGNiG. “This was to be expected as the job of chairman of PGNiG is a geopolitical post.”