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Problems still in the pipeline: between Russia and Poland on a potential gas deal

Poland-Russia gas deal hits road block

Poland has failed to strike a gas deal with Russia that would secure supplies sufficient to meet its needs starting in 2010, but talks would continue, the Economy Ministry said in a statement today.

The ministry said the sides could not agree over the functioning of Europolgaz, a joint venture between PGNiG and Gazprom that manages the Yamal pipeline in Poland.

At the moment PGNiG has a slight upper hand at Europolgaz as it names the chief executive.

"The sides agreed talks would be continued soon," Reuters quoted the Ministry's as saying in a statement.

Warsaw had wanted to strike a deal by the end of July and officially sign it during Prime Minister Vladimir Putin's visit to Poland, expected in September.

Poland, which imports about two-thirds of the gas it uses from Russia, would be short of some 2.5 billion metres annually starting from 2010 with Russia the only supplier capable of filling the gap.

Poland receives gas from Russia through the Yamal pipeline, which is capable of carrying about 30 billion cubic metres of gas annually to Europe, but the government wants to diversify from its dependence by building a liquefied natural gas terminal.

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