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15 Jan, 2022 14:01

Gazprom takes EU state to court

Russian energy giant seeks arbitration against Poland’s main gas retailer over contract price
Gazprom takes EU state to court

Gazprom Export has applied for international arbitration in its dispute with PGNiG over an upward revision of a gas contract price, a demand the Polish state-owned gas monopoly has said it would fight in court.

“As business negotiations on the price revision in line with above requests did not lead to agreements, we referred the dispute to arbitration, in full compliance with the contract terms,” Gazprom Export said in a statement.

According to the Russian company, the claim is aimed at revising the price terms of a 1996 contract with PGNiG retrospectively. Gazprom Export noted that it had sent a request to PGNiG to revise the price of gas under the contract starting from November 2017, before making another request three years later.

Pawel Majewski, PGNiG CEO, called Gazprom’s demand to increase the contract price “groundless,” adding that his company is “prepared to prove this before the arbitration tribunal.”

The Polish firm also stated that Gazprom is demanding an increase in the price of gas supplies under the Yamal contract, which is “unreasonable.” In October 2021, PGNiG applied for a reduction in gas prices under the contract clinched with Gazprom.

The dispute comes amid a broader standoff between Russia and the European Union, with Brussels accusing Gazprom of holding back supplies and driving up prices of natural gas. Russian authorities have repeatedly rejected the allegations, saying that they are groundless.

Meanwhile, Moscow is awaiting clearance from Germany and the EU for the Gazprom-led Nord Stream 2 gas pipeline to start gas exports. The much-debated project is set to double the existing pipeline’s capacity by 55 billion cubic meters of gas per year. 

Poland has been one of the most vocal opponents of the pipeline, saying that it would increase Moscow’s energy leverage against the bloc.

Europe is currently struggling with a devastating energy crisis that has hit the region over the past several months, sending natural gas prices spiking nearly fivefold.

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