Talks between the two gas companies are drawing to an end. A meeting of the representatives of PGNiG and Gazprom was scheduled for last Friday (October 14th) at 10.00 pm, to coincide with the meeting of the Supervisory Board of EuRoPol Gaz. Unfortunately, the meeting did not take place. Representatives of Gazprom left for the airport promptly after the opening ceremony of EuRoPol Gaz's new headquarters. Different information regarding the circumstances of the meeting provided by the Russian party should be treated as an element of the negotiation strategy. PGNiG hopes an agreement will be reached by the end of October.

In April 2011, PGNiG filed a formal request to change the gas prices. If no agreement is reached, the Company will file an application with the arbitration court. It is entitled to do so under Art. 15 of the Yamal Contract which stipulates that should the parties fail to reach an agreement within six months of the date of a request to renegotiate prices, each party may refer the case to the Arbitration Court in Stockholm. The procedure provides that the party submitting the case for arbitration must notify the other party of the arbitrator's name and the subject of the dispute by registered letter. Within 30 days of receipt of the letter, the other party must designate a second arbitrator. The arbitrators are to name the Chairperson of the Arbitration Tribunal within 30 days of their appointment. Resolutions of the Arbitration Tribunal are adopted by majority vote. The Arbitration Tribunal should make a decision within three months as of the appointment of the Chairperson. The proceedings would be conducted in line with the UNICITRAL Arbitration Rules.

Due to significant changes that have recently taken place on the European gas market and in order to reflect the EU market prices in contracts with Gazprom, the majority of European suppliers of Russian gas have decided to renegotiate the prices. PGNiG have also decided that such an adjustment is necessary.

Joanna Zakrzewska

Spokeswoman