Gazprom says Poland transit deal delay endangers gas exports to EU

By Shadia Nasralla and Vladimir Soldatkin

VIENNA (Reuters) - Kremlin-controlled Gazprom (MM:GAZP), Europe's largest gas supplier, has warned of risks to its deliveries to Europe via Poland as Warsaw has yet to accept new terms for gas transit.

"We've heard that Poland does not intend to prolong the transit deal. This puts at risk supplies to European countries, including Germany," Gazprom's deputy chief executive Alexander Medvedev said in an interview cleared for Wednesday publication.

Poland, which imports most of the gas it consumes from Russia, has said it does not plan to renew a long-term supply contract with Moscow when the deal with Gazprom expires in 2022.

However, Medvedev added: “We don’t have plans for and haven't even thought about cuts or stoppages to transit via Poland."

Russia supplies gas to Poland and Germany via the Yamal-Europe pipeline, with an annual capacity of around 33 billion cubic meters.

Formerly communist Poland has been one of the staunchest critics of increased Russian gas exports to Europe. It also voiced protests over Moscow's plans to double the capacity of the undersea Nord Stream gas pipeline to Germany.

Medvedev told Reuters that Gazprom is on track with plans for Nord Stream 2 and expected to receive financing this year from its European partners for the pipeline project.

Nord Stream 2, initially due for launch in 2019, has faced opposition from some European politicians amid a standoff with Russia over Ukraine.

Last year, Gazprom said it would consider annulling the shareholder agreement meant to implement the project after Poland's anti-monopoly watchdog objected to the consortium that was to finance, build and operate the pipeline.

However, Gazprom has said the 9.9 billion euro ($10.7 billion) Nord Stream 2 will go ahead. The company is partnered in the project by Uniper (DE:UN01), Wintershall (DE:BASFn) (WINT.UL), Shell (L:RDSa), OMV (VI:OMVV) and Engie (PA:ENGIE).

"We have been searching and have already found ways of this project's implementation with the participation of our foreign partners ... These would be the same partners," Medvedev told Reuters.

"I'm rather sure that a solution that will not be in contradiction with European or member states' regulation will be found ... Spending should be done this year," he said.

Medvedev also said Nord Stream 2 could feed Britain with natural gas.

"Subject to the signing of the contracts, it could go. Interconnectors are available. BBL could bring us to the United Kingdom even without any additional investments or substantial investments," he said. BBL is a natural gas interconnector between the Netherlands and Britain.

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Nord Stream 2 is intended to bypass Ukraine, a key route for Russian gas flows to Europe, as rows between Moscow and Kiev have previously led to stoppages in supplies from Russia.

Due to political tensions between the two neighbors, Ukraine has not bought Russian gas since 2015. Kiev has proposed to raise tariffs for Russian gas transportation, irking Gazprom.

Medvedev said the company was ready for talks with Kiev.

He also said the company would continue auctioning its gas in northwest Europe, with the next sale planned for early summer.

OMV DEAL

Another big Gazprom project, an asset swap with Austrian energy group OMV (VI:OMVV), has also yet to clear the final hurdle.

Gazprom agreed in December on a long-awaited deal with OMV to swap a 24.9 percent holding in the Achimov IV and V formations of its huge Siberian Urengoy field for a 38.5 percent stake in OMV's Norway holding company.

OMV has said it expected the deal to close in mid-2017.

But Norwegian authorities have not yet approved the deal and Gazprom had previously said the Scandinavian country, traditionally an energy competitor of Russia, did not want Gazprom to get more than 25 percent in OMV's Norway unit.

"Our partner OMV was in contact with Norwegian authorities ... At this stage it's informal consultations," Medvedev said, adding more talks with OMV could follow once Norway's new oil minister, appointed last month, was ready.

Asked whether he was optimistic that Norway would clear the deal, Medvedev said: "Don't think about bad things and the bad things will not come. I'm positive. I'm optimistic."

On another possible asset deal, the proposed acquisition from Gazprom of four of the Arctic's Tambey gas fields by Russian No. 2 gas producer Novatek (MM:NVTK), Medvedev said the company was reluctant to sell the deposits.

He also said Gazprom had no plan to sell its 10 percent stake in Novatek. "This is a core asset," he said.