Russian gas supplies to Poland were completely halted on Wednesday, April 27, at 8:00 a.m. In a press release, Gazprom said that the reason for halting gas supplies to Poland was the Polish side’s rejection of making payments for gas in rubles. Gazprom also stopped supplying gas to Lithuania and Bulgaria.

In connection with the situation, Polskie Górnictwo Naftowe i Gazownictwo issued a statement on April 27:

Information on the suspension of natural gas supplies under the Yamal contract:

Polskie Górnictwo Naftowe i Gazownictwo SA reports that the supply of natural gas delivered by Gazprom under the Yamal contract has been completely halted. The situation currently has no impact on ongoing deliveries to PGNiG customers, who are receiving fuel in line with their demand.

Despite PGNiG fulfilling all obligations arising from the Yamal contract, on April 27 this year Gazprom ceased carrying out the natural gas deliveries it is required to make under that contract and PGNiG’s nominations.

In PGNiG’s assessment, the restriction of natural gas supplies constitutes a breach of the Yamal contract. PGNiG reserves the right to pursue claims arising from the suspension of deliveries and will use all contractual rights available to the company, as well as rights arising from applicable law, for this purpose.

According to information provided to PGNiG by Gazprom, it halted deliveries in connection with the provisions of Decree No. 172 of the President of the Russian Federation of March 31, 2022, “On a special procedure for the fulfillment by foreign purchasers of obligations to Russian natural gas suppliers.”

The effect of the decree is an attempt to impose on some of Gazprom’s counterparties an obligation to maintain settlement accounts at a bank located under the jurisdiction of the Russian Federation and to make the final payment for the gas supplied in Russian rubles. After thoroughly analyzing the decree, PGNiG’s Management Board rejected the proposed settlement terms as inconsistent with the applicable provisions of the Yamal contract and decided to make payments according to the existing rules set out in the contract.

At present, despite Gazprom ceasing to carry out deliveries, PGNiG customers are receiving gas in line with their reported demand.

Thanks to the consistent implementation by PGNiG and GAZ-SYSTEM of a strategy to diversify the sources and directions of gas supplies to Poland, PGNiG has diverse options for obtaining it. The company can purchase gas both from the European Union, through connections with Germany and the Czech Republic, and from the international LNG market via the terminal in Świnoujście, whose regasification capacity was increased this year. Domestic extraction is also an important source of natural gas, while gas storage facilities in Poland provide additional security for meeting domestic demand. They are currently being filled, and their fill level is now approximately 80 percent.

PGNiG remains in constant contact with OGP GAZ-SYSTEM SA, which is responsible for the safe operation of Poland’s transmission infrastructure. The companies are monitoring the situation and will keep the market informed on an ongoing basis.