10
PGNiG
Letter from the President
of the Management Board
thus increasing the storage capacity from 1.63 to
1.83bn cubic meters. A major project is also un‑
derway to increase the capacity of our largest gas
storage facility in Wierzchowice. The three-year
long investment process will be completed in 2012
and the facility’s capacity will be doubled, to 1.2bn
cubic meters.
2010 also saw frst results in our new business
line – power engineering. In May 2010, PGNiG SA,
PGNiG Energia SA, Tauron Polska Energia SA and
Elektrownia Stalowa Wola SA signed a project
agreement for construction of a 400MW CCGT unit
in Stalowa Wola. In March 2011, all project partners
executed all contracts and agreements required for
the project implementation. PGNiG will act as the
gas fuel supplier and the unit will become opera‑
tional in 2014. In 2010, we also decided to establish
PGNiG Technologie by consolidating construction
and assembly companies from the PGNiG Group,
with a view to enhancing our competitive posi‑
tion in this area and acquiring contracts for large
projects.
I believe the Group’s presence on foreign markets
to be a signifcant factor contributing to its growth,
and we can boast a number of successful initiatives
in this area. In 2011, we will launch production of
crude oil and gas from our frst foreign location,
in the Norwegian Continental Shelf. All works
required under the Skarv/Snadd/Idun project are
proceeding on schedule and within the budget.
Also, in 2010 PGNiG Norway acquired interests in
another two exploration licences located in the
North Sea. Our German company, POGC Trading, is
also expected to commence operations in 2011. Its
business activity will comprise trading in natural
gas, including gas transported from our Norwegian
felds to continental Europe.
Last year saw a tangible growth of demand for gas
fuel – we sold a record-breaking volume of 14.4bn
cubic metres of natural gas. This was primarily
attributable to low temperatures at the beginning
and at the end of the year, and, to a larger extent,
to a visibly stronger demand for the fuel from
industrial customers. In 2010, we executed two
contracts for natural gas daliveries, with Grupa
D e a r L a d i e s a n d G e n t l eme n ,
O n b e h a l f o f P o l s k i e G ó r n i c t wo N a f t owe
i G a z own i c t wo S p ó ł k a A k c y j n a , a s we l l a s o n
my own b e h a l f , I p r e s e n t t h e P G N i G G r o u p ’ s
2 0 1 0 A n n u a l R e p o r t , a d o c ume n t a d d r e s s e d
t o o u r s h a r e h o l d e r s , i n v e s t o r s , c u s t ome r s ,
a n d o t h e r c a p i t a l ma r k e t p a r t i c i p a n t s .
The results of 2010 are a reason for satisfaction –
since the foatation of its shares on the Warsaw
Stock Exchange never had the Company recorded
such good performance. Sales revenue stood at a
record-high level of PLN 21.3bn and net proft – at
PLN 2.5bn. These results were attributable primar‑
ily to a record-breaking volume of natural gas sold
as well as to higher revenue from sales of crude
oil and geological/geophysical and exploration
services.
In 2010, the Company focused on negotiating the
terms of the gas contract with Russia, and after
many months of discussions, in October 2010, an
annex to the Yamal Contract was executed. Under
the annex, the volume of natural gas delivered to
Poland was increased and the ban on gas re-export
was lifted. Furthermore, the annex introduced
a preference price for deliveries in the period
2010–2014 (USD 20m – USD 50m). The discount
obtained in 2010 enabled us to reduce the price
for gas fuel in the frst quarter of 2011 – the entire
discount was refected in the gas prices paid by our
customers.
The key objective behind all efforts of the PGNiG
Management Board has always been to secure
reliable and stable supplies of natural gas, both to
households and industrial customers. This, how‑
ever, requires not only time, but also substantial
capital expenditure on developing the Polish gas
system, increasing the capacities of our under‑
ground gas storage facilities, or exploring for and
producing natural gas and crude oil. PGNiG invests
billions of złoties to pursue these objectives and
the results are becoming increasingly more visible.
In 2010, the Company completed the underground
storage facility for nitrogen-rich gas in Boników,
Mission
Key Figures
Key Events
Letter from the
President of the
Management
Board
Management
Board
Letter from the
Chairman of the
Supervisory Board Supervisory Board
PGNiG on the Stock
Exchange
Strategy for the
PGNiG Group
until 2015
Exploration
and Production