Poland’s longstanding aim to reduce Russian influence in its neighbourhood got a boost this month when PGNiG, a state energy company, announced a series of agreements to import liquid natural gas (LNG) from US suppliers, including a 20-year deal with Houston-based Cheniere. The latter contract, signed during the US energy secretary’s official visit to Poland in November, offered a reported 20% price cut when compared with Polish imports bought from Gazprom, the Russian state energy company.
Earlier in June, the Arbitration Institute of the Stockholm Chamber of Commerce (SCC), the traditional broker for East-West business disputes, ruled that Gazprom was obligated to renegotiate the price of Polish LNG purchases as outlined in its Yamal contract, and apply the new price retroactively from November 2014. Gazprom appealed the decision, stoking an exchange of curt press releases.
Since 2014, Poland has been upgrading its own gas pipeline infrastructure, some of which is controlled by Russia. The government is now considering extending its network across the Baltic Sea from the port terminal of Swinoujscie to afford better access to Norwegian gas fields. Although Russia continues to provide some two-thirds of Poland’s energy supplies, LNG imported from the US, Qatar and Norway accounted for 18% of the country’s energy consumption in the first half of 2018 and is expected to grow.
In the longer term, Poland hopes to erode Russia’s energy leverage in the wider region and supplement shipments to Ukraine in the event of another suspension of imports, following strategic stoppages by Russia during periods of heightened bilateral tension in 2009 and 2014. If Poland provides an alternative energy hub in central and eastern Europe, it may also gain influence with the EU, and dampen continental criticism of its own controversial domestic policies.