Polish talks continue

January 7, 1999, 08:00 CET

Negotiations on selling Norwegian gas to Poland are to continue, the two sides have agreed.

Under way since the autumn of 1996, these talks involve Norway's Gas Negotiating Committee (GFU) and the state-owned Polish Oil and Gas Company (POGC).

The aim is to conclude a contract during the spring on selling some 500 million cubic metres of gas per annum to Poland from 2000.

"Gas will be delivered by the GFU to Emden in north-west Germany," says Egil Haaland, marketing manager for central and eastern Europe in Statoil's Natural Gas Marketing & Supply business area. "Transporting it through Germany will be the POGC's business."

Chaired by Statoil, and with Norsk Hydro and Saga Petroleum as its other permanent members, the GFU is responsible for selling Norwegian gas. Total and Elf are also involved in the talks with Poland.

"Both buyer and seller are very confident that agreement can be reached," emphasises Mr Haaland.

He reports that the idea is to use existing capacity in Norway's gas production and transport systems. This will provide gas owners with additional value added in the short term without the need for further investment.

If a sales contract is agreed, the two sides will continue to explore prospects for increasing both delivery volume and contract duration from a later date.

This work will include studies of laying a gas pipeline from the Norwegian continental shelf to Niechorze on the Polish coast. But two factors are crucial for expanding a possible sales deal, Mr Haaland notes.

First, oil prices must rise in order to justify investment in additional production and transport capacity off Norway. And sufficient gas sources must be secured to increase the level of Norwegian exports.