The Polish government could in the coming weeks amend its gas storage law, which many market participants regard as the main obstacle to challenging the dominance of state-controlled Orlen.
Poland's current storage law — the Act on Stocks — obliges gas-importing companies to maintain stocks covering 30 days of imports that can be delivered within 40 days to the Polish grid. Importers can also keep inventories outside the country, but must also hold enough transport capacity to import all those volumes within 40 days.
Orlen and strategic reserves agency Rars offer a system of call options, but market participants say the service is also expensive and does not address the underlying legislational issues in Poland. The European Federation of Energy Traders (Efet) and several companies have criticised the laws for several years, with Efet's head of Polish affairs Pawel Lont telling Argus this week that Polish storage laws need a "proper overhaul".
One proposed amendment to the storage law welcomed by Efet and several other parties would shift the obligation to maintain gas reserves from importers to end users and Rars.
Efet and others had proposed that the storage obligation should only cover 35pc of the maximum monthly consumption for "protected consumers" such as households, hospitals and schools, rather than all end users, as that would significantly reduce aggregate storage obligations.
But the government later rejected that idea, claiming it could undermine energy security by allowing gas reserves to potentially reach low levels.
Another proposed amendment supported by traders would require Rars to fulfil its storage obligations by buying gas on Poland's TGE exchange, adding to liquidity and price transparency on the platform.
If the amendments are passed, traders expect third-party imports to rise gradually and spur competition in the Polish gas market. That said, this is likely to be a slow process as securing Polish gas import licences can be a lengthy procedure and Orlen presently enjoys advantages over other market participants such as holding the full 5.6mn t/yr of long-term import capacity at the Swinoujscie LNG terminal, as well as access to substantial credit lines guaranteed by the state treasury.
Lobby groups now expect the government in the coming weeks to pass the reforms to the storage bill, which stalled after public consultations in spring last year.
The government's legislative agenda includes a plan to approve the amendments by the end of this month — a deadline almost certain to be missed — but sources told Argus they had received assurances that the government intends to amend the storage law before general elections tentatively planned for mid-October.
The European Commission has suggested that Poland change its storage law. Doing so now might help the government in return win permission from the EU to provide continued support for coal-fired power generation in the country beyond 2025, according to one source.
