Polskie Grnictwo Naftowe i Gazownictwo SA: Arbitration between Gazprom and PGNiG regarding the contract price under the Yamal contract

On January 14, 2022, Polskie Górnictwo Naftowe i Gazownictwo received notice of arbitration before the ad hoc Arbitral tribunal in Stockholm of the lawyer of PAO Gazprom and OOO Gazprom Export of arbitration. The notice includes a request to revise the contract price of natural gas supplied by Gazprom on the basis of the Yamal contract. Gazprom expects a retroactive increase in the contract price based on Gazprom’s review requests of December 8, 2017 and November 9, 2020.

The request for an increase in the contract included in Gazprom’s opinion is absolutely unfounded. We are well prepared to prove it before the arbitral tribunalme, said Paweł Majewski, CEO of PGNiG SA.

PGNiG is continuing its efforts to revise the pricing conditions for the delivery of natural gas under the Yamal contract. Notably, that the above-mentioned Gazprom requests for review were submitted in response to PGNiG’s requests for a decrease in the contract price from November 1, 2017 and November 1, 2020, provided that, at the time of record high gas prices in Europe, The November 2020 PGNiG application was amended on October 28, 2021.

Gazprom’s submission of the Notice of Arbitration triggers the dispute resolution procedure specified in the Yamal contract. PGNiG will take the necessary measures to enforce its rights and protect the interests of the Company.

PGNiG twice exercised, in 2011 and 2015, its right to initiate arbitration under the Yamal contract. Following the procedure initiated in 2015, in March 2020, the Arbitral Tribunal revised the price formula provided for in the contract, granting PGNiG’s request.

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