Poland Will Go to International Arbitration Court if Gas Agreement with Russia is Not Reached by End of Year

Poland is preparing to seek help from the international court of arbitration if it is unable to reach an agreement with Russia to review a major gas contract. This was announced by the Polish Chancellor Jacek Piechota. According to Polish news agency IAR Poland signed an agreement with Russia in 1996 on the supply of natural gas for a period of 25 years. Poland agreed to buy 12.5 billion cubic metres of gas, 10 billion of which would be supplied through the second branch of the Yamal gas pipeline. However, the second branch has still not been built. Furthermore, recent economic figures show that Poland's demand for gas will soon decrease by 30% in comparison with the 1996 figures. According to the current agreement Poland is unable to sell on Russian gas. In January of this year, during a visit of Russian President Vladimir Putin, representatives of the Polish government proposed a review of the contract. Poland would like to decrease its supply of gas from Russia.

On the basis of this contract, which includes a planned increase in the supply of gas through the second branch of the Yamal pipeline, Russia is expecting Poland to increase the carrying capacity of this branch by building extra compressor plants. However, the Russian and Polish parties involved have still not reached an agreement on how to increase the capital of Evropolgas which is the operator of the first branch of the Yamal gas pipeline.