Poland to oblige PGNiG to sell 30 percent of its gas on exchange

WARSAW Tue Oct 2, 2012 6:33am EDT

WARSAW (Reuters) - Poland will oblige natural gas monopoly PGNiG PGN.WA to offer 30 percent of its sales on the country's fledgling gas exchange to inspire the liberalization of central and eastern Europe's largest gas market, a ministry official said on Tuesday.

State-controlled PGNiG sells nearly all of the gas available in Poland, of which around 70 percent goes to industry and the rest to individuals. Gas prices are capped by energy market regulator URE.

Poland plans to set up a gas exchange in the fourth quarter and to pare the dominant position of PGNiG in the market, where demand totals more than 14 billion cubic meters (bcm).

The government, the regulator and PGNiG have for months debated how to liberalize the gas market and the question of how much gas should be offered on the exchange has been a key theme.

PGNiG and the regulator agreed a few months ago that the monopoly would offer at least 0.1 bcm of gas per quarter at the launch of the exchange, less than 1 percent of Poland's gas consumption.

But this will change once Poland implements a new gas law. The Economy Ministry in December 2011 made public three draft bills on energy, gas and renewables, which are expected to be enacted in 2013 after several postponements.

"It will be 30 percent," the head of the ministry's oil and gas department Milosz Karpinski told Reuters on the sidelines of an industry seminar, referring to the obligation to sell gas via an exchange that will be imposed on PGNiG.

He added that the draft gas law is "practically ready to be printed" and sent to the government and, later, to the parliament. "We hope it will be enacted by the end of the year, although this is something beyond us."

Obliging PGNiG to sell part of its gas on the exchange copies an idea introduced by Poland in 2010 for utilities, a step taken as part of liberalizing its power market.

(Reporting by Maciej Onoszko; Editing by David Holmes)

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