Poland’s PGNiG to pull out of Iran contract

Andrew Harrer / POOL

Poland’s gas giant PGNiG is to suspend projects with Iran following US President Donald Trump’s announcement of the US withdrawal from the Iranian nuclear agreement and the renewal of sanctions on Iran.

Maciej Woźniak, vice president of commercial affairs at PGNiG said the company plans to suspend a large project providing gas extraction technical expertise with Iran for fear that the United States will impose sanctions on the company. 

He said: “We can take risks when we are drilling and looking for hydrocarbons, but we will not take risks playing politics. There is not much we can do about the contract in Iran. Any moment the sanctions will be put in place and nobody wants to take a risk.”

In recent years, Poland has reduced its gas supply from Russia, following growing tensions between the two countries after the Russian invasion of Crimea and Russia increasing gas prices. In response to the Russian demand, Poland in 2016 completed a liquefied natural gas terminal to diversify away from the Russian gas it's been buying since 1944.

Following Trump’s announcement, other European companies also said they would suspend joint projects with Iran. French gas giant Engie announced last Thursday that it plans to end all its engineering contracts with Iran by November. The largest French oil exploration and drilling company “Total” has announced that it will withdraw from an agreement it signed with Iran in 2016, immediately after the nuclear agreement was signed. 

The suspension of agreements with Iran by the largest European oil and gas companies could also lead major financial institutions to suspend their agreements with Iran. Germany's DZ Bank said on Friday it would also suspend financial transactions with Iran in July, fearing US sanctions.