(Updates with analyst comments in fourth paragraph.)
Feb. 21 (Bloomberg) -- Polskie Gornictwo Naftowe i Gazownictwo SA, Poland’s dominant gas distributor known as PGNiG, filed a suit in an international arbitration court, seeking lower prices in a delivery contract with OAO Gazprom.
PGNiG filed the suit in a Stockholm court yesterday, after opening the arbitration in November, the Warsaw-based company said in a statement today. State-owned PGNiG pays more than $500 per 1,000 cubic meters, Treasury Minister Mikolaj Budzanowski said last month. Gazprom expects its average European gas price at about $415 per 1,000 cubic meters this year, up from $384 in 2011, Gazprom said in a presentation to investors this month.
PGNiG, which buys about 70 percent of its gas from Russia, was losing “several million zloty” a day last month as Poland’s energy regulator delayed an approval of an increase in gas prices, according to Deputy Chief Executive Officer Miroslaw Szkaluba. The distributor has been awaiting the regulator’s decision since October.
“There is some chance to get lower prices, even though it’s slim,” said Pawel Burzynski, an analyst at Bank Zachodni WBK SA in Warsaw. “It’s a question of Gazprom’s good will, based on its assessment of whether Poland has access to alternative sources of gas, which at the moment, contrary to western European peers, it doesn’t.”
Gazprom said in January it agreed to lower prices for five European customers, including Wingas and GDF Suez SA. Apart from PGNiG, Gazprom is still negotiating prices and is in arbitration with EON AG’s Ruhrgas unit and RWE AG’s Czech unit, Alexander Medvedev, deputy chief executive officer of Gazprom and head of its export unit Gazprom Export, said on Feb. 16.
“We started negotiations with Poland later and it’s a specific market” with a bigger role of coal and only one supplier of imported gas, Medvedev said in an interview in New York on Feb. 16. “It is a standard procedure and I do hope that in the course of a couple of months we will be in position to reach compromise solutions.”
Poland, the biggest post-communist country in the European Union, is seeking to cut its reliance on Russian gas supplies. The government is urging its energy companies, including power utilities, to intensify search for shale gas as it may be 50 percent cheaper than the Russian gas. The country may hold enough fuel trapped in shale to meet its needs for 300 years, according to estimates from the U.S. Department of Energy.
Joanna Zakrzewska, a PGNiG spokeswoman, wasn’t immediately available for further comments when contacted by phone today.
PGNiG shares gained 0.3 percent to 3.72 zloty at 1:17 p.m. in Warsaw, trimming this year’s decline to 8.8 percent and valuing the company at 21.9 billion zloty ($6.9 billion).
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