Page 11 - Annual_Report

9 2010 Annual Report
July
On July 19th2010, PGNiG was notifed that
Mr Marek Karabuła resigned from membership
of the Supervisory Board of PGNiG. On the same
day, the Supervisory Board appointed Mr Marek
Karabuła to the Management Board, as
Vice-President of the Management Board.
PGNiG entered into a comprehensive agreement
with KGHM Polska Miedź SA. The agreement
provides for the sale of natural gas to be used as a
power generation fuel in two combined cycle gas
turbine (CCGT) units with the capacity of 45MWe
each, delivered to the Głogów and Polkowice col‑
lection points. The target annual amount of gas to
be delivered is 266 million cubic metres. The agree‑
ment is effective from its date until June 30th2033,
and contains a provision whereunder the start of
gas supplies may be set at a date between July 1st
and December 31 st2012. The value of the agree‑
ment is estimated at approx. PLN 4.0bn.
August
The Supervisory Board of PGNiG received a res‑
ignation (for personal reasons) by Mr Waldemar
Wójcik from the position of Vice-President of the
Management Board of PGNiG in charge of Oil Min‑
ing, with effect from August 15 th2010.
PGNiG Norway made early repayment of the
full amount (along with interest) of a NOK 3.8bn
(PLN 1.89bn) intra-group loan advanced by PGNiG
on October 16 th2007. Concurrently, PGNiG and
PGNiG Norway entered into a new loan agree‑
ment for NOK 4.4bn (PLN 2.19bn). The loan is to
be repaid by December 20th 2021. The loan will be
used to fund PGNiG Norway’ general corporate
needs, including current capital expenditure and
exploration-related expenses.
PGNiG Norway entered into a USD 400m
(PLN 1.25bn) Reserve Based Loan agreement with
seven banks, whereunder the lenders’ claims are
secured with specifc oil and gas reserves. It is a
revolving credit facility, advanced for seven years.
The key objective of the agreement is to fnance
the expenditure on the development of the Skarv
feld. PGNiG Norway has the possibility to fexibly
use any funds which remain after the fnancing
needs related to the Skarv project have been
satisfed.
September
PGNiG and Instytut Nafty i Gazu (the Oil and Gas
Institute) signed an agreement for partial fnancing
of project “Wierzchowice Underground Storage Fa‑
cility”, for up to PLN 503.6m, including 100% of the
amount provided as direct payment. The amount
of the partial fnancing depends on the amount
of eligible expenditures incurred in the course of
performance of the agreement.
The President of the Energy Regulatory Offce
approved a change of the gas fuel tariff, effective
from October 1st2010 to March 31st 2011. After
the change, the average price of high-methane
gas rose by approx. 6.34%. The rates of network
charges and subscription fees did not change. The
average amount of total charges related to the
supplies of high-methane gas to customers rose
by 4.4%. The price of high-methane gas was in‑
creased as a consequence of higher purchase costs
of imported gas, which were driven by volatility in
the PLN/USD exchange rate.
The Management Board of PGNiG announced that
in order to ensure gas supplies to households
and utilities it might decide to limit supplies to
industrial customers in Q4 2010. The situation was
due to the failure to execute an annex to the Yamal
Contract for the supplies of natural gas from Russia
to Poland, increasing the volume of gas imports.
As the entire volume of natural gas contracted for
2010 was offtaken by PGNiG at the Drozdovitse and
Vysokoye cross-border points, a defcit at these de‑
livery points was expected after October 20th2010.
In such circumstances, the quantities of gas from
domestic production, underground gas storage
facilities, imports through the transit pipeline and
from countries west of Poland were not suffcient
to meet the demand for natural gas in the fourth
quarter of 2010.
October
PGNiG SA and OAO Gazprom/OOO Gazprom Export
signed an annex to the Yamal Contract of Septem‑
ber 25th1996. The annex provides for an increase
in the volume of natural gas supplies to Poland in
2010 – 2022 and lifts the ban on gas re-export to
third-party countries without Gazprom Export’s
consent. The annex also introduces a preference
price in the period 2010 – 2014 for the quantities
of gas offtaken in a given year above the con‑
tracted Minimum Annual Quantities. The estimated
average annualised value of the contract for the
supplies of Russian gas at the time of the annex
execution was approx. PLN 8.5bn.
November
The Company was notifed of the execution of
an annex, dated October 22nd, to the agreement
between PGNiG and EuRoPol GAZ of July 1st2004
for the transmission of natural gas through the Ya‑
mal – Western Europe pipeline. In the annex PGNiG
and EuRoPol GAZ agreed to extend the term of the
agreement from December 31st2012 to December
31st2022. The other provisions of the agreement
remained unchanged.
December
PGNiG and Instytut Nafty i Gazu (the Oil and Gas
Institute) signed an agreement for partial fnanc‑
ing of project “Strachocina Underground Gas
Storage Facility”, for up to PLN 53.2m, including
100% of the amount provided as direct payment.
The amount of partial fnancing depends on the
amount of eligible expenditures incurred in the
course of performance of the agreement.
The President of the Energy Regulatory Offce
approved a second change of the tariff for the sup‑
plies of gas fuels, reducing the price of high-meth‑
ane gas and nitrogen-rich gas by 3.23%. The new
prices of gas fuels were introduced for the period
from January 1st2011 to March 31st 2011. The rates
of network charges and subscription fees did not
change. As a result, the average amount of total
charges related to the supplies of high-methane
gas to customers fell by 2.3%. In connection with
the negotiated discount for natural gas obtained
from Gazprom Export, PGNiG applied for the low‑
ering of the tariff for gas sale effective until March
31st2011.
PGNiG and Instytut Nafty i Gazu (the Oil and Gas
Institute) signed two further agreements for partial
fnancing of projects involving the construction
and expansion of underground gas storage facili‑
ties. Project “Kosakowo Underground Gas Storage
Cavern Facility” received co-fnancing of up to
PLN 93.5m, while Project “Mogilno Underground
Gas Storage Cavern Facility” received co-fnancing
of up to PLN 23.1m. In both cases, 100% of the
amount was provided as direct payment.
PGNiG and OGP GAZ-SYSTEM SA entered into two
agreements for the transmission of high-methane
and nitrogen-rich natural gas. The agreements
are effective from January 1st2011 to December
31st2014. The estimated aggregate value of the
two agreements over their entire term is approx.
PLN 5.96bn (VAT exclusive).
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