DIRECTORS' REPORT ON PGNiG SA'S OPERATIONS ... - Notowania

Directors’ Report on PGNiG S.A.’s Operations in 2008
In the early weeks of 2009, supplies of gas from the eastern markets were disrupted as a result of the
conflict between Russia and Ukraine. Furthermore, gas supplies from ROSUKRENERGO AG have
been suspended since January 2009, although the relevant agreement remains in force until January 1st
2010. As a result of reducing and then finally discontinuing gas supplies delivered through the
Drozdovitse cross-border point, gas supply routes were changed and more gas has been delivered
through the Vysokoye cross-border point. Gas supplies delivered through Drozdovitse were resumed,
but gas volumes are lower, as a result of the failure of deliveries under the ROSUKRENERGO AG
agreement. In order to secure a sufficient level of gas supplies to its customers, PGNiG S.A. increased
the use of gas held in storage facilities. Following discussion with OOO Gazprom eksport, the
Company secured a temporary increase in the volume of gas collected under the effective agreement.
2. Sales
In 2008, PGNiG S.A. signed comprehensive agreements for supply of gaseous fuel, from both
transmission and distribution systems, to 92.9 thousand new customers, including 91 thousand
households.
Pursuant to the provisions of the Polish Energy law, in 2008 PGNiG S.A. commenced replacement of
commercial agreements with comprehensive agreements. The process is expected to be completed by
December 31st 2009.
The key products sold by this segment are high-methane natural gas and nitrogen-rich gas. In 2008,
sales of natural gas (high-methane equivalent) grew by approx. 1.5% (or 195 million m 3 ) year on year.
PGNiG S.A. sold gas both in Poland and on international markets. The structure of 2008 sales by the
Trade and Storage segment is presented in the table below.
Sales structure of key products
1 Natural gas, including: million m 3
Unit 2008 2007
13,250.8 13,056.2
- high-methane gas million m 3 12,437.8 12,233.1
- nitrogen-rich gas* million m 3 813.0 823.1
2 Propane-butane
thousand
tonnes
2.1 2.1
* Million m 3 measured as high-methane gas equivalent
The Group’s main customers who purchased natural gas included chemicals sector, the steel industry
and the power sector, as well as households. Households make up the largest group of customers
purchasing natural gas, accounting for 97% of the entire customer base (approx. 6.4m). Their share in
the sales volume is 26%. The most prominent share in the natural gas sales was claimed by industrial
customers (62%).The table below presents the structure of natural gas sales measured as high-methane
gas equivalent broken down by major customers.
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