August 31, 2011 / 12:05 PM / 8 years ago

PGNiG says likely to go to court with Gazprom

WARSAW, Aug 31 (Reuters) - Poland’s gas monopoly PGNiG is likely to end up at an arbitrage court in its row with Gazprom over the price of its long term gas supply contracts, the monopoly’s deputy head Przemyslaw Duczinski said on Wednesday.

The monopoly says it suffers from high import prices that under long term gas contracts with Gazprom which are tied to oil prices, as its European peers press for a discount.

“We have a contractual deadline for negotiations until October and if we fail in these then we will go to arbitrage court. Looking at Gazprom actions at the moment it is a likely scenario,” Dudzinski said.

Dudzinski added PGNiG is seeking at least a 10 percent discount to current prices it pays and the discount, if it is awarded, would be implemented retroactively from April.

PGNiG imports from Russia about two thirds of its annual 14 billion cubic metres of gas sales. The gas prices it can charge its customers are set by a state regulator.

The watchdog URE allowed for a single-digit rise in prices starting from mid-July, nearly three months later than the monopoly originally sought one of the reasons why PGNiG reported a 20 million zloty net loss in the second quarter. (Reporting by Patryk Wasilewski)

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