Polish Incumbent Sells Storage Service
Polish state monopoly PGNiG is now, for a fee, taking care of gas importers' mandatory storage needs with its ticketing service, it said October 16. So far, 11 traders have paid the incumbent to store an average 3mn m³ with effect from October 1.
"With the ticketing service in place, the companies involved in natural gas imports to Poland no longer need to arrange the storage of mandatory stocks of natural gas on their own. The total volume of gas stocks kept by PGNiG on behalf of other companies amounts to nearly 370,000 MWh," it said.
Polish law requires all suppliers to keep the mandatory stocks of natural gas in storage facilities located in Poland or countries that are a party to the agreement in the European Economic Area. One way to satisfy this statutory requirement is to sign a so-called ticketing service contract, ordering another entity to keep the mandatory stocks in a storage facility on its behalf. The energy minister will decide when the gas has to be released, with the aim of maintaining uninterrupted supplies to households and industry.
The facilities are all in Poland and owned by the state. Appropriate storage capacity has already been allocated by PGNiG, and gas stocks have been injected, it said.
Despite PGNiG's dominant position in the Polish gas market and the monopoly of the gas storage business, the service was nevertheless "offered under competitive conditions,” said the trading manager of PGNiG Maciej Wozniak. “In essence, this means that we make some of the gas we own, already injected in the storage facility, available to the importers, providing them with comprehensive services in terms of gas stock management and logistics. As a result our counterparties do not have to go through the complicated logistical process, and are able to focus on their core business instead,” he added.
Poland introduced a mandatory petroleum stocks law in 2007 as a protection against supply disruptions, but it has since been criticised for not letting the market take care of that risk where gas is concerned, including the use of storage in neighbouring countries, or flexible supply contracts. Under the law, mandatory stocks of natural gas must be maintained by entities carrying out a business activity in respect to foreign trade of natural gas and entities bringing in natural gas to Poland for their own use.
The transmission system operator can access importers' gas reserves as asked by the energy minister. Events justifying this move include disruption to the supply of natural gas; an unforeseen network damage or failure causing a threat to gas system security; or an unforeseen increase in natural gas demand.
William Powell