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    PGNiG profits soar in 2020


The Polish company gained from a $1.5bn arbitration award that resolved a gas price dispute with Russia's Gazprom.

by: Joe Murphy

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Natural Gas & LNG News, Europe, Corporate, Financials, News By Country, Poland

PGNiG profits soar in 2020

Net profits at Polish gas company PGNiG surged to 7.34bn zlotys ($1.9bn) in 2020, from 1.37bn zlotys in the previous year, thanks largely to a settlement payment its Russian supplier Gazprom made for previously overcharging for gas.

Under a ruling by an arbitration court in Stockholm, Gazprom paid PGNiG $1.5bn during the summer for previously overpricing gas supplies. It also agreed to amend the pricing formula in the pair's long-term supply agreement, known as the Yamal contract.

PGNiG's Ebitda grew 46% to 8.6bn zlotys in 2020, due to the change in the pricing formula that Gazprom uses. But revenues declined to 39.2bn, from 42bn zlotys in 2019, even though gas sales increased by 3%, owing to weaker prices.

"The arbitral award in favour of PGNiG against Gazprom was undoubtedly the most important event of 2020 for us from the financial point of view. Our results were considerably improved by the one-off refund by the Russian gas supplier of the overpayments made by PGNiG from 2014 to 2020," PGNiG president Pawel Majewski said. "However, far more important was the establishment of a new pricing formula under the Yamal contract, as it will affect the cost of gas procurement in the coming quarters."

Upstream, gas production was stable at 4.52bn m3, and gas distribution volumes were also unchanged at 11.6bn m3.