Sales
PGNiG is the largest domestic seller of natural high-methane and nitrogen-rich gas fed into the transmission and distribution networks. Gas trading is regulated by the Polish Energy Law, with prices established based on tariffs approved by the President of Energy Regulatory Office. In 2012, PGNiG sold 14.59 bn m³ of natural gas outside the Group, including 13.87 bn m³ (95.1%) sold by the Trade and Storage segment.
Sales of natural gas in Poland are based on the following two systems:
- The high-methane gas network used for imported gas, gas produced from fields in southern Poland, as well as gas fed into the network by nitrogen rejection units, produced from fields in western Poland;
- The nitrogen-rich gas transmission networks serve to route the gas from domestic reserves located in the Polish Lowlands to the nitrogen rejection units and customers.
In terms of sales volumes, PGNiG’s largest customers in 2012 served by the Trade and Storage segment included industrial customers (chemical, refining, petrochemical and metallurgical plants), as well as households. Households are the largest group of customers purchasing natural gas, as they account for 97% of the entire customer base (approximately 6.5 m). Their share in the total volume of sales through the Trade and Storage segment was approximately 27.5%.
Natural gas is also sold in Germany via XOOL GmbH, acquired by PGNiG Sales & Trading in 2012. The acquired company sells natural gas to end consumers on the German market and has close to 17,000 customers).
In 2012, the PGNiG Sales & Trading group sold 0.3 bn m³ of natural gas outside the PGNiG Group.
In the third quarter of 2012, PGNiG launched sales of electricity to business customers. In the first quarter of 2013, it launched sales of electricity to households (tariff group G).
Capex projects
The capital expenditure incurred in 2012 in the Trade and Storage segment amounted to PLN 574 m. Key projects focused on the construction and extension of underground gas storage facilities, and included:
- Construction of the surface part of the Wierzchowice Underground Gas Storage Facility;
- Cavern leaching as part of the construction of the Kosakowo Underground Gas Storage Cavern Facility;
- Construction of four caverns of the Mogilno Underground Gas Storage Cavern Facility.
Other capex projects carried out in the Trade and Storage Segment related to information and communication technologies, purchase and clarification of the legal status of property, as well as asset replacement and maintenance.
Storage facilities
PGNiG owns eight underground gas storage facilities, located in two different types of geological structures – salt caverns (underground cavern gas storage facilities) or depleted gas and oil reservoirs. Six of them are used to store high-methane gas (Wierzchowice, Husów, Mogilno, Strachocina, Swarzów and Brzeźnica Underground Gas Storage Facilities), and the other two are nitrogen-rich gas storage facilities (Daszewo and Bonikowo Underground Gas Storage Facilities).
Short-term peak fluctuations in demand for natural gas are balanced out with the supplies from the Mogilno Underground Gas Storage Cavern Facility, where gas is stored in worked-out caverns. The capacities of the Wierzchowice, Husów, Strachocina, Swarzów and Brzeźnica Underground Gas Storage Facilities are used to minimise the effect of changes in demand for natural gas in the summer and winter seasons, meet the obligations under the take-or-pay import contracts, ensure the continuity and security of natural gas supplies, and to meet the obligations under agreements providing for the delivery of natural gas to customers’ premises.
The capacities of the Wierzchowice, Husów, Mogilno and Strachocina facilities are used by the Group to meet its obligation to maintain mandatory stocks, imposed by the Polish Act on Stocks of Crude Oil, Petroleum Products and Natural Gas as well as the Rules to be Followed in the Event of Threat to National Fuel Security or Disruptions on the Petroleum Market, dated February 16th 2007.
In order to bring the structure of its gas storage operations in line with the independence requirements stipulated by Art. 15 of Directive 2009/73/EC of the European Parliament and of the Council of July 13th 2009 concerning common rules for the internal market in natural gas, repealing Directive 2003/55/EC, PGNiG undertook the process of legal unbundling of the storage system operator. An important step in the process was the assignment to Operator Systemu Magazynowania Sp. z o.o. (“OSM” - a wholly-owned subsidiary of PGNiG) of the role of storage system operator at PGNiG’s storage facilities, by executing an agreement on May 11th 2012 for exclusive operation of the storage facilities and designation of the storage system operator.
On June 1st 2012, based on a decision of the President of the Energy Regulatory Office licensing OSM to store gas fuel at storage facilities and designating it as the storage system operator, OSM started to operate the storage system. In accordance with its licence for gas fuel storage at storage facilities, OSM provides its services at the following underground gas storage facilities:
Mogilno Underground Gas Storage Cavern Facility – a high-methane gas storage site with the working capacity of 411.5 m m³, located in the province of Bydgoszcz, county of Mogilno, municipalities of Mogilno and Rogowo. The facility is located in salt caverns, allowing it to achieve high injection and withdrawal capacities. Mogilno is currently being extended to 800 m m³ of storage capacity.
Bonikowo Underground Gas Storage Facility – a storage site for Lw nitrogen-rich gas with a working capacity of 200 m m³. Bonikowo was commissioned in 2010. The role of the Bonikowo Underground Gas Storage Facility is to help optimise the production of Lw nitrogen-rich gas in western Poland, which is why its capacities are not classified as storage facilities within the meaning of the Polish Energy Law.
Husów Underground Gas Storage Facility – a high-methane gas storage site with a working capacity of 350 m m³. It is located in the province of Rzeszów, county of Łańcut, municipalities of Łańcut and Markowa. The facility’s working capacity is currently being extended to 500 m m³.
Daszewo Underground Gas Storage Facility – a storage site for Ls nitrogen-rich gas with a working capacity of 30 m m³, located in a partially depleted crude oil reservoir. Daszewo is used to optimise production and supply of Ls gas to the Koszalin region at times of peak demand. As Daszewo is used to optimise production, its capacities are not classified as storage facilities within the meaning of the Polish Energy Law. The licence for gas storage in depleted reservoirs at the Daszewo Underground Gas Storage Facility authorises PGNiG to store 60 m m³ of gas. Gradual injection of additional gas quantities is planned to ultimately achieve the working capacity of 60 m m³.
Wierzchowice Underground Gas Storage Facility – a high-methane gas storage site. It is located in a partially depleted nitrogen-rich gas reservoir, in the province of Wrocław, county of Milicz, municipalities of Milicz and Krośnice. With a working capacity of 575 m m³, it is the largest underground gas storage facility in Poland. The facility’s working capacity is currently being extended to 1,200 m m³.
Strachocina Underground Gas Storage Facility – a high-methane gas storage site with a working capacity of 330 m m³. It is located in the province of Rzeszów, county of Sanok, municipalities of Sanok and Brzozów.
Brzeźnica Underground Gas Storage Facility – a high-methane gas storage site with a working capacity of 65 m m³. The facility is located in the province of Rzeszów, county of Dębica, municipality of Dębica. Preparations are currently under way to expand its working capacity to 100 m m³ .
Swarzów Underground Gas Storage Facility– a high-methane gas storage site with a working capacity of 90 m m³. It is located in the province of Kraków, county of Dąbrowa Tarnowska, municipalities of Dąbrowa Tarnowska and Olesno. Swarzów is one of the oldest gas storage facilities in Poland.
Another storage facility in salt caverns is under construction:
Kosakowo Underground Gas Storage Cavern Facility – a high-methane gas storage site, located in the vicinity of the Gdańsk-Gdynia-Sopot agglomeration. The facility’s working capacity is planned at 250 m m³. Completion of the Kosakowo project is scheduled for 2021.
Working capacities of the underground gas storage facilities (m m³)
| Working capacity [m m³] 2012 | Working capacity [m m³] Target capacity | Year extension/construction completed | |
|---|---|---|---|
| High-methane gas | |||
| Brzeźnica | 65 | 100 | 2016 |
| Husów | 350 | 500 | 2014 |
| Kosakowo | 0 | 250 | 2021 |
| Mogilno | 412 | 841 | 2023 |
| Strachocina | 330 | 330 | - |
| Swarzów | 90 | 90 | - |
| Wierzchowice | 575 | 1,200 | 2013 |
| Nitrogen-rich gas | |||
| Bonikowo | 200 | 200 | - |
| Daszewo | 30 | 30 | - |
Location of underground gas storage facilities
As at December 31st 2012, OSM operated storage sites with an aggregate capacity of 1,821.5 m m³, of which 1,796 m m³ were reserved under long-term contracts. 25.89 m m³ of the Mogilno site’s capacity were made available under short-term storage service (25.5 m m³) and used to cover the facility’s own needs (0.39 m m³). The Bonikowo and Daszewo storage sites are used to store nitrogen-rich gas. The total volume they can store is 230 m m³.
Working storage capacities made available to third parties as at December 31st 2012
| Working storage capacities (m m³) | |
|---|---|
| High-methane gas | |
| PMG Brzeźnica | 65 |
| PMG Husów | 350 |
| KPMG Mogilno | 411,5(1) |
| PMG Strachocina | 150 |
| PMG Swarzów | 90 |
| PMG Wierzchowice | 575 |
| Nitrogen-rich gas | |
| Bonikowo | 200 |
| Daszewo | 30 |
| Total | 2051.5 |
| (1) The amount includes the working capacity made available to OGP Gaz-System SA. and working capacities made available on a short-term basis. |
In the period from January 1st to December 31st 2012, the following long-term storage capacity allocation procedures were carried out:
- procedure for making storage capacity available as part of services provided on a continuous and intermittent basis at the Mogilno Underground Gas Storage Cavern Facility (34 m m³) and Strachocina Underground Gas Storage Facility (180 m m³) – April/May 2012;
- procedure for making storage capacity available as part of services provided on an intermittent basis at the Wierzchowice Underground Gas Storage Facility (175 m m³) – June 2012;
- procedure for making storage capacity available as part of services provided on a continuous a basis at the Mogilno Underground Gas Storage Cavern Facility (302 m m³) – deadline for submitting applications expired in August 2012.
As at December 31st 2012, all the working underground storage capacities had been allocated.
EU programmes
In 2012, under the EU Infrastructure and Environment Operational Programme, PGNiG and the Oil and Gas Institute of Kraków signed annexes to agreements for co-financing of the following projects:
- Wierzchowice Underground Gas Storage Facility
Value of the project: PLN 1,853,220,668.00;
Maximum level of co-financing: PLN 512,810,000.00;
Intensity of aid: 56% of eligible project costs;
Period for determining the eligibility of expenditures: May 16th 2007 – March 31st 2014.
The project involves building surface infrastructure and drilling production wells.
- Kosakowo Underground Gas Storage Cavern Facility
Value of the project: PLN 544,743,166.65;
Maximum level of co-financing: PLN 130,528,440.87;
Intensity of aid: 57% of eligible project costs;
Period for determining the eligibility of expenditures: June 26th 2007 – March 31st 2015.
The project provides for building four caverns, a leaching unit, a pipeline for brine discharge and surface infrastructure.
- Strachocina Underground Gas Storage Facility – Project completed and settled
Value of the project: PLN 489,113,375.41;
Maximum level of co-financing: PLN 69,724,881.76;
Intensity of aid: 57% of eligible project costs;
Period for determining the eligibility of expenditures: May 16th 2007 – June 30th 2012.
- In 2012, an agreement was also signed for co-financing of the project designated as “Switching customers in Ełk and Olecko from propane-butane to E type gas using LNG technology”.
Value of the project: PLN 18,612,383.45;
Maximum level of co-financing: PLN 7,020,906.07;
Intensity of aid: 48% of eligible project costs;
Period for determining the eligibility of expenditures: September 1st 2012 – September 30th 2013.