Oil Report

UPDATE 1-Poland and Russia agree on new gas deal

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WARSAW, Dec 10 (Reuters) - Poland and Russia agreed on a new gas deal ending months of negotiations over extended supplies of natural gas to Poland starting in 2010, Poland’s economy ministry said in a statement on Thursday.

“The intergovernment agreement on gas supplies for Poland is a result of negotiations that took place in Moscow,” the ministry said in the statement.

The deal now has to be rubberstamped by the Polish government and will be signed by the Prime Minister.

Poland, which imports about two-thirds of its gas from Russia, faces an annual shortfall of 2.5 billion cubic metres from 2010 and needed a new deal to plug the gap as of 2010.

Although a preliminary agreement was clinched between PGNiG and Gazprom in October, the negotiations at government level dragged on due to last minute changes demanded by Russia.

Under the deal agreed by PGNiG PGNI.WA and Gazprom GAZP.MM Poland would import 10.3 billion cubic metres of gas annually directly from Gazprom until 2037, up from about 7-8 billion metres earlier. (Reporting by Patryk Wasilewski; Editing by Keiron Henderson)