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Equinor in 10-year deal to sell gas to Poland's PGNiG

·1-min read
Equinor's logo is seen next to the company's headquarters in Stavanger

OSLO/WARSAW (Reuters) -Norway's Equinor said on Friday it had entered into a 10-year agreement to sell natural gas to Poland's PGNiG as the central European nation scrambles to replace flows from Russia before the winter heating season kicks in.

The deal covers a volume of 2.4 billion cubic metres per year, or around 15% of Polish annual consumption, the two companies said.

"The contracts we have just signed ... (result) in a significant strengthening of energy security of our country," PGNiG Chief Executive Iwona Waksmundzka-Olejniczak said in a joint statement with Equinor.

The gas will be transported through the new Baltic Pipe gas pipeline, which opens next week and has an annual capacity of 10 bcm.

The volumes under the new agreement reflected market prices, Equinor said without elaborating.

PGNiG, which has booked some 80% of the Baltic Pipe's capacity, said on Friday that its own output on the Norwegian shelf - estimated at 3 bcm this year and forecast to reach 4 bcm in the next few years - would make up the bulk of the flows through the link.

The company said it had also agreed several gas contracts with producers in Norway, of which the deal with Equinor accounts for the biggest volume.

Poland was cut off from Russian gas in April after refusing to pay Moscow in roubles. The flows from Norway along with supplies via a liquefied gas terminal are key to replacing the Russian supply.

The contract with Equinor supplements Poland's LNG supply, domestic output and potential imports via interconnectors with its neighbours ahead of the coming winter.

(Reporting by Terje Solsvik and Marek Strzelecki, editing by Nerijus Adomaitis, Kirsten Donovan)