Polish Minister Loses Post After Gazprom Pipeline Row

Polish Prime Minister Donald Tusk dismissed Treasury Minister Mikolaj Budzanowski for failing to inform him about a deal with OAO Gazprom (GAZP) over the Russian natural gas producer’s pipeline expansion plans.

Gazprom and Poland’s Europol Gaz SA on April 4 signed a memorandum to study a proposed 15 billion cubic-meter pipeline called Yamal-Europe 2 from Russia via Poland to Slovakia, bypassing Ukraine. Tusk and Budzanowski weren’t aware of the deal, even though the plan was known to state-controlled gas distributor Polskie Gornictwo Naftowe i Gazownictwo SA (PGN), the prime minister said at a news conference in Warsaw today.

Tusk nominated Deputy Administration Minister Wlodzimierz Karpinski as new treasury minister and called for “quick personnel decisions” in PGNiG.

“Despite my respect for Budzanowski’s qualifications, he failed to adequately supervise strategic companies in charge of energy security,” Tusk said.

Poland wants to cut dependence on gas imports from Russia via more links with other European Union members, liquefied natural gas imports and domestic output. Meanwhile, the country won’t participate in any attempt to isolate Ukraine via a bypass pipeline, Tusk said on April 5.

Shares Drop

PGNiG shares fell as much as 2 percent to 5.34 zloty after Tusk’s comments and traded down 1.1 percent to 5.39 zloty at 2:24 p.m. in Warsaw, valuing the company at 31.8 billion zloty ($10.2 billion)

Joanna Zakrzewska, a spokeswoman for PGNiG, declined to comment on Tusk’s news conference or whether Chief Executive Officer Grazyna Piotrowska-Oliwa plans to quit.

Karpinski, a 51-year-old chemical engineer, will be in charge of most state-controlled companies. The government seeks to raise 5 billion zloty from dividends in companies in which it holds stakes this year and a further 5 billion zloty from sales of stakes to help prop up public finances.

Energy security, shale-gas exploration and the effective supervision of state companies will be his priorities, Karpinski, a former management board member at fertilizer maker Zaklady Azotowe Pulawy SA (ZAP), told reporters today.

Gazprom seeks to reduce its dependence on transit via Ukraine after clashes led to reductions in shipments to Europe twice from 2006 to 2009. The Russian company and PGNiG hold 48 percent in Europol Gaz each, with the remaining 4 percent held by Gas-Trading SA.

To contact the reporters on this story: Maciej Martewicz in Warsaw at mmartewicz@bloomberg.net; Marek Strzelecki in Warsaw at mstrzelecki1@bloomberg.net

To contact the editor responsible for this story: James M. Gomez at jagomez@bloomberg.net

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