DIRECTORS' REPORT ON PGNiG SA'S OPERATIONS ... - Notowania
DIRECTORS' REPORT ON PGNiG SA'S OPERATIONS ... - Notowania DIRECTORS' REPORT ON PGNiG SA'S OPERATIONS ... - Notowania
Directors’ Report on PGNiG S.A.’s Operations in 2008 at the Kosakowo Underground Gas Storage Cavern Facility. Available capacities of the storage facilities as at the end of 2008 are presented in the table below. Available capacities of storage facilities in the Trade and Storage segment million m 3 Husów 400.0 Mogilno 380.2 Wierzchowice 575.0 4. Activities Planned in the Trade and Storage Segment The Baltic Pipe Project The objective of the project is to create a direct pipeline for the supply of natural gas from Denmark to Poland and also, in future, from Poland to Denmark. In 2008, pursuant to a cooperation agreement executed by PGNiG S.A., OGP GAZ-SYSTEM S.A. and Energinet.dk on November 15th 2007, the parties jointly conducted technical analyses and worked on the detailed arrangements relating to the execution of the Baltic Pipe project. On December 16th 2008, PGNiG S.A. and OGP GAZ-SYSTEM S.A. executed Agreement on Acquisition of Documentation and Termination of Cooperation Agreement regarding the Baltic Pipe Project. On January 29th 2009, the Extraordinary General Shareholders Meeting of PGNiG S.A. decided to sell the documentation related to the implementation of the Baltic Pipe project to OGP GAZ-SYSTEM S.A. According to current plans, OGP GAZ-SYSTEM S.A. is to take responsibility for the execution of the project going forward. In 2009, PGNiG S.A. and OGP GAZ-SYSTEM S.A. will jointly undertake geophysical studies of the seabed on specified alternative versions of the Baltic Pipe routes, with a view to selecting the optimum course. The Skanled Project In 2007, PGNiG S.A. joined the consortium established for the purpose of construction of the Skanled gas pipeline which is designed to connect a gas terminal on the Norwegian Continental Shelf with Sweden and Denmark. PGNiG S.A. acquired a 15% stake in the project and became one of its 15 shareholders. The investment is executed by Gassco, a Norwegian operator of off-shore gas pipelines. In January 2008, the Skanled Consortium approved the technical changes in the design, consisting primarily in the increase of the pipeline diameter in order to raise its throughput. On April 17th 2008, the members of the Consortium resolved to commence the pre-design stage of the project and concurrently approved the changes to the technical concept of the network proposed by Gassco, which increased the estimated cost of the project. The investment decision is planned to be made in October 2009. According to the project schedule, the Skanled gas pipeline is to be placed in operation in 2013. In November 2008, Hafslund Varme & Infrastructure, holder of a 10% interest in the Skanled consortium, withdrew from the consortium. As a result of negotiations with external investors, it was agreed that VNG-Verbundnetz Gas AG would join the consortium. It was also decided that the new consortium member would acquire the 10% interest in the consortium and reserve capacity on the Skanled gas pipeline. The composition of the Skanled Consortium again changed in February 2009 when the state-owned Norwegian company Petoro AS joined the consortium. It acquired the interests of Ostfold Energi and Agder Energi, which withdrew from the consortium, and a part of the interest 30 of 55
Directors’ Report on PGNiG S.A.’s Operations in 2008 held by Skagerak Energi. In total, Petoro AS acquired a 25% interest in the project, thus becoming the largest shareholder in the Skanled Consortium. Concurrently, PGNiG S.A. is working on the transfer of its stake in the Skanled Project to its Norwegian subsidiary, PGNiG Norway AS. The Boernicke-Police Interconnection Trade with the German market is the rationale for constructing the Boernicke-Police interconnection linking Poland and Germany. In October 2008, PGNiG S.A. launched the construction of a 14kilometers gas pipeline Tanowo-Dobieszczyn. Natural Gas Purchase As a result of failure of gas deliveries under the ROSUKRENERGO AG contract, PGNiG S.A. is taking action to obtain gas from alternative sources. Therefore, the existing structure of gas imports may change. Furthermore, in 2009 the Company will seek to ensure LNG supplies and execute a longterm supply contract. Natural Gas Sales The projected rise in the natural gas sales volume is attributable to development investments of PGNiG S.A.’s strategic customers in the petrochemical, construction and steel sectors. In 2008, PGNiG S.A. continued cooperation, started in 2007, concerning possible gaseous fuel supplies with several major prospective customers, including companies operating in the power sector and planning to replace hard coal fired generating units with gas fired ones. Supplies of natural gas for the needs of the upgraded power/CHP plants are planned to commence in 2012-2013. Underground Gas Storage Facilities On November 19th 2008, PGNiG S.A. and consortium comprising PBG S.A. Przeźmierowo, Tecnimont S.p.A. (Italy), Societe Francaise d’Etudes et de Realisations d’Equipements Gaziers SOFREGAZ (France), Plynostav Pardubice Holding A.S. (the Czech Republic), and Plynostav – Regulace Plynu A.S. (the Czech Republic) executed an agreement on the project designated as the Construction of the Surface Section of the Wierzchowice Underground Gas Storage Facility, Phase: 3.5 billion nm 3 , Subphase: 1.2 billion nm 3 . The agreement’s value is approx. PLN 1.1bn. In 2009, PGNiG S.A. will commence drilling and construction of the surface section of the Wierzchowice Underground Gas Storage Facility. Additionally, other plans provide for drilling and construction of a leaching plant at the Kosakowo Underground Gas Storage Facility and further development of the Mogilno Underground Gas Storage Cavern Facility. 5. Trade- and Storage-Related Risks High Natural Gas Prices The major risk factor posing a threat to gas market growth is the price of natural gas, which is high relative to the price of alternative energy sources, especially coal. This situation is a serious impediment to the growth of gas power business. As a result of the change to the PGNiG S.A. tariff and the economic slowdown in Poland, industrial customers scale down their production activities and reduce investments, which, to a large extent, affects the volume of gas sold by PGNiG S.A. Furthermore, given the rising prices of gas, some customers actively seek alternative energy sources. 31 of 55
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Directors’ Report on <strong>PGNiG</strong> S.A.’s Operations in 2008<br />
held by Skagerak Energi. In total, Petoro AS acquired a 25% interest in the project, thus becoming the<br />
largest shareholder in the Skanled Consortium.<br />
Concurrently, <strong>PGNiG</strong> S.A. is working on the transfer of its stake in the Skanled Project to its<br />
Norwegian subsidiary, <strong>PGNiG</strong> Norway AS.<br />
The Boernicke-Police Interconnection<br />
Trade with the German market is the rationale for constructing the Boernicke-Police interconnection<br />
linking Poland and Germany. In October 2008, <strong>PGNiG</strong> S.A. launched the construction of a 14kilometers<br />
gas pipeline Tanowo-Dobieszczyn.<br />
Natural Gas Purchase<br />
As a result of failure of gas deliveries under the ROSUKRENERGO AG contract, <strong>PGNiG</strong> S.A. is<br />
taking action to obtain gas from alternative sources. Therefore, the existing structure of gas imports<br />
may change. Furthermore, in 2009 the Company will seek to ensure LNG supplies and execute a longterm<br />
supply contract.<br />
Natural Gas Sales<br />
The projected rise in the natural gas sales volume is attributable to development investments of<br />
<strong>PGNiG</strong> S.A.’s strategic customers in the petrochemical, construction and steel sectors. In 2008,<br />
<strong>PGNiG</strong> S.A. continued cooperation, started in 2007, concerning possible gaseous fuel supplies with<br />
several major prospective customers, including companies operating in the power sector and planning<br />
to replace hard coal fired generating units with gas fired ones. Supplies of natural gas for the needs of<br />
the upgraded power/CHP plants are planned to commence in 2012-2013.<br />
Underground Gas Storage Facilities<br />
On November 19th 2008, <strong>PGNiG</strong> S.A. and consortium comprising PBG S.A. Przeźmierowo,<br />
Tecnimont S.p.A. (Italy), Societe Francaise d’Etudes et de Realisations d’Equipements Gaziers<br />
SOFREGAZ (France), Plynostav Pardubice Holding A.S. (the Czech Republic), and Plynostav –<br />
Regulace Plynu A.S. (the Czech Republic) executed an agreement on the project designated as the<br />
Construction of the Surface Section of the Wierzchowice Underground Gas Storage Facility, Phase:<br />
3.5 billion nm 3 , Subphase: 1.2 billion nm 3 . The agreement’s value is approx. PLN 1.1bn. In 2009,<br />
<strong>PGNiG</strong> S.A. will commence drilling and construction of the surface section of the Wierzchowice<br />
Underground Gas Storage Facility. Additionally, other plans provide for drilling and construction of a<br />
leaching plant at the Kosakowo Underground Gas Storage Facility and further development of the<br />
Mogilno Underground Gas Storage Cavern Facility.<br />
5. Trade- and Storage-Related Risks<br />
High Natural Gas Prices<br />
The major risk factor posing a threat to gas market growth is the price of natural gas, which is high<br />
relative to the price of alternative energy sources, especially coal. This situation is a serious<br />
impediment to the growth of gas power business. As a result of the change to the <strong>PGNiG</strong> S.A. tariff<br />
and the economic slowdown in Poland, industrial customers scale down their production activities and<br />
reduce investments, which, to a large extent, affects the volume of gas sold by <strong>PGNiG</strong> S.A.<br />
Furthermore, given the rising prices of gas, some customers actively seek alternative energy sources.<br />
31 of 55
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