Russia, Poland at loggerheads over Gazprom move

EurActiv ^ | Friday 4 November 2005

[lizol]

Russia, Poland at loggerheads over Gazprom move

In Short:

Poland sees its energy security seriously threatened by a recent request by Russia's natural gas giant Gazprom to re-negotiate its long-term gas delivery contract with Warsaw.

Brief News:

Russia's Gazprom has expressed its intention to revise its gas supply contract with Warsaw. The contract expires in 2022. According to Gazprom, it is normal business procedure to regularly revise pricing conditions of gas supplies. However, Poland, which receives 42% of its gas from Gazprom, sees no reason to re-negotiate the terms of the 1996 supply agreement.

Gazprom's move follows protests by Warsaw earlier this year over the planned construction by Russia and Germany of a gas pipeline under the Baltic Sea that would bypass Poland. The four billion euro, 1,200 kilometre pipeline would supply vast amounts of gas to western Europe, notably Germany and later Britain, from 2010. Gazprom currently provides 25% of Europe's gas. It is Russia's largest company and controls 25% of the world's gas reserves. The Russian government has a 51% stake in Gazprom.

According to some Polish analysts, Moscow's aim with the move is to transform its near monopoly on energy supplies into political dominance in central Europe.

[lizol]

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[lizol]

I thaught Russians would wait with such a move until the Baltic pipeline is completed.

But they must be really impatient.
Or pissed off with the Polish election results, so they want to show the new Polish government where Poland's place in the line is.

[Atlantic Bridge]

The German energy oligopole (RWE, Eon, Ruhrgas) lost a lawsuit about their long time supply treaties with German municipal utility service companies. Those treaties where a charter to fix prices for the providerside without any control. Now the energy suppliers (Eon, RWE and Ruhrgas) have to proof their outstanding bills through a reproducible calculation. Therefore they need higher gas prices...

This is to me a probable reason why Gasprom, who has a close cross-shareholding with its German partners is interested to push prices.

Personally I am for free trade and against any state-run business. But the German energymarket (electicity and gas) is runned by crooks who own a oligopole/monopole. They have for sure price-fixing agreements among each other and suck out all their customers. They can do it because they had exclusice conditions with German gouvernments for a long time. On this base they could build up their quasi monopole. Therefore it would be the best to dispossess them and to open this market.

[GarySpFc]

The Poles have clearly shown their contempt for Russia, and the latter is simply going to build pipelines around Poland to avoid the controversy. Foul clients are more trouble than they are worth.

[lizol]

Foul client???

I thaught it was all about business - someone sells something to someone else, who's paying for it.
At least RusIvan, jb6 (and you too, probably) maintained so.

Have you heard of any problems with Polish payments for the gas supplies???

Or maybe it's rather Russia's tool of geo-politics?

Which is more likely in my opinion.

[GarySpFc]

A foul client is one who complains all the time. Poland clearly qualifies, and I cannot blame Russia one iota for building a pipeline bypassing Poland.

[lizol]

So you admit, that this pipeline is not about business, but about bypassing Poland, that complains all the time.

If Poles face the possibility to be cut off gas supplies - they will stop complaining about Russia.

And this is the point, not some BS about transfer fees.

[DTA]

>>>>>>And this is the point, not some BS about transfer fees.<<<<

Of course it is. But Polish diplomacy should think about pesky details such as being cut off from natural gas supply before poking the bear and instigating others to do the same. Bear has elephant memory. You know what newly established Russian holiday celebrates? An event from 1612.

[lizol]

Polish diplomacy should think about pesky details such as being cut off from natural gas supply before poking the bear and instigating others to do the same.

But Polish diplomacy is fully aware of that. This potential threat has always been a problem - no matter whether we "poke the bear" or not.

Bear has elephant memory. You know what newly established Russian holiday celebrates? An event from 1612.

Which is something I find as ridiculous.

[SaltyJoe]

What are the chances that Poland can divest its efforts into multiple available energy resources (hydroelectric, coal, wind & solar, and nuclear) so that Poles will never be at the mercy of other nations?

What are the possibilities that Lithuania and Ukraine will help Poland with nuclear power plants?

I know that the word "nuclear" is about the scariest noise in the human language, but do Poles really need anyone's permission to take care of her own people?

[lizol]

I haven't really heard anything about any plans to build a nuclear power plant in Poland.

What I know is, that Poland will try to diversify gas and oil supplies by building (or connecting to) a pipeline from Norway or Nabucco pipeline from Iran (via Turkey - Balkans - Austria) and pipeline Odessa - Brody (Ukraine), which will allow to pump Caspian oil braught by tankers through the Back Sea.

[SaltyJoe]

How is the domestic coal industry? I was reading that coal use to be the largest source of energy for Poland before it kicked out communism. Have those mines reopened, or is it cheaper to import energy?

[GarySpFc]

So you admit, that this pipeline is not about business, but about bypassing Poland, that complains all the time.
If Poles face the possibility to be cut off gas supplies - they will stop complaining about Russia.
And this is the point, not some BS about transfer fees.

No, it is clearly about business. Your comment to the effect only selling and paying is all that is involved with business reflects a socialist mentality. There is a saying in American business, "Ninety-five percent of your problems are caused by 5% of your customers. Eliminate that 5% and it frees you up to focus on other potential and more profitable clients." That is the essence of business.

[lizol]

It's under transition. Many of the coal mines were closed down.

However - those ones which remained working become more and more profitable. So - maybe it's a good idea to reopen some of those, which were closed down.

[lizol]

You're maundering, Gary.

If it was about business - there wouldn't be any problem at all.
Poland signed a long-term contract with Russian state-owned company Gazprom for the period 1996-2022. The contract settles amount of gas, that is supposed to be delivered to Poland and the way how the price is supposed to be defined (in relation to many factor, including prices of oil).
Gas' beeing delivered and Poland is paying the price, that has been agreed.

There are no problems about it at all.

The problems, that are between Poland and Russia are purely political.

And Russia is using gas, pipelines and all that stuff, as a kind of "weapon". Very mighty one.

So don't you tell me, that this is about business.

[SaltyJoe]

Smells like opportunity :-)

I'm sure the Polish business gurus know not to over stretch their means. Where would Poland get their heavy machinery?

Would ya'll get something like this from the Germans:



Or, would you can get buckets and earth movers from Komatsu:





I'll bet a US dollar that the Poles can put one together from scratch, but it might be cheaper to find one on E-bay.

The balancing act is to not bring down the price of energy too quickly with a flood of coal on the market. That way, Polish coal can slowly grow, but always in an upward direction. If you import workers to keep the cost of labor low, make sure they come from fiercely Catholic nations that are 100% Pro-Life and a bastion of Heterosexuality. Plus, the interracial marriages will produce very cute babies and good looking supermodels...not that Polish babes aren't already pretty...uh, I'll stop digging now.

[GarySpFc]

You, the client, want to come into my office and scream about how you hate my Russian wife. I decide I don't want your business, and I run you out of my office. You then cry foul, and say your attitude about my wife has nothing to do with our conducting business. I'm sorry, but if you cannot see your problem, then there is no hope of our ever having a business relationship, much less a friendship.

[lizol]

You (the businessman) signed an agreement with me (a client) for something like 30 years.

You deliver your stuff, I'm paying.

The problem is, that I don't like your wife.

Show me the court, that would give you the right to brake the agreement off only because of that.

[Lukasz]

There is a plan to build nuclear plant in Poland, but you know it is a long term strategy.... The coal lobby in Poland is powerful and they try to block everything which is against their interests.