PGNiG: Execution of annex to the Yamal Contract between PGNiG and PAO Gazprom/OOO Gazprom Export

The Management Board of Polskie Górnictwo Naftowe i Gazownictwo SA (“PGNiG”) announces it has executed an annex (the “Annex”) amending the contract for purchase and sale of natural gas to the Republic of Poland dated September 25th 1996 between PGNiG and PAO Gazprom/OOO Gazprom Export (the “Yamal Contract”). The Annex was executed on June 5th 2020 in electronic form and subsequently, by June 15th 2020, its original counterparts were signed and exchanged between the Parties.

By way of the Annex, the Parties have confirmed the terms on which the pricing formula for the purchase of gas supplied under the Yamal Contract, as set out in the final award issued by the Arbitration Institute of the Stockholm Chamber of Commerce on March 30th 2020, will be applied in practice. Furthermore, the Annex sets out the terms on which the financial consequences of the application of the new pricing formula retroactively as of November 1st 2014 will be mutually settled between the Parties. As a result, the Company expects Gazprom to return the overpayment estimated at approximately USD 1.5bn (exclusive of tax) (see Current Report No. 13/2020 of March 30th 2020). The deadline for refund of the overpaid amount by Gazprom has been set at July 1st 2020.

PGNiG points out that the contract price for gas supplied by Gazprom may be revised in the future effective as of November 1st 2017 following the Company’s request to renegotiate the price, as announced by the Company in Current Report No. 91/2017 of November 1st 2017. Furthermore, the Company points out that the contract price may be revised in the future following a renegotiation request submitted by Gazprom, as announced by the Company in Current Report No. 96/2017 of December 8th 2017.

Publication of information on the Annex execution was deferred on June 5th 2020 until its original counterparts were signed and exchanged between the Parties, as permitted by Article 17(4) of Regulation (EU) No. 596/2014 of the European Parliament and of the Council of April 16th 2014 on market abuse and repealing Directive 2003/6/EC of the European Parliament and of the Council and Commission Directives 2003/124/EC, 2003/125/EC and 2004/72/EC.