Russia's Gazprom, Poland's PGNiG settle gas price dispute

Russian gas behemoth Gazprom has reached an agreement with Polish natural gas monopoly PGNiG on the pricing of natural gas supplies to Poland through the Yamal-Europe gas pipeline, bringing and end to the long-standing pricing dispute between the two companies.

The agreement also ends up the legal proceedings in the arbitration court in Stockholm, between PGNiG and Gazprom.

The new pricing reflects the changed market conditions for natural gas in Europe in recent years, taking into account current market prices for oil and gas.

Warsaw-based PGNiG is Poland's largest petroleum company with its core business in gas trading. The company buys most of its gas from Gazprom and distributes it in the domestic market at regulated prices.

The state-owned PGNiG was transformed into a joint stock company in 1996.

PGNiG believes that the new gas pricing formula will boost its operating profit by up to $933 million.