Distribution
Through Polska Spółka Gazownictwa Sp. z o.o., natural gas is supplied to households as well as to SME customers. In 2013, the volume of gas supplied through the gas distribution network was 10.3 bn m³. The reliability and stability of supplies through this network are attested to by the growing number of connections, the extending length of the network including connections, and the increasing number of consumers to whom gas fuel is distributed.
Key Events
- On July 1st 2013, the merger of six gas distribution companies was registered. The companies:
- Dolnośląska Spółka Gazownictwa Sp. z o.o. of Wrocław;
- Górnośląska Spółka Gazownictwa Sp. z o.o. of Zabrze;
- Mazowiecka Spółka Gazownictwa Sp. z o.o. of Warsaw;
- Karpacka Spółka Gazownictwa Sp. z o.o. of Tarnów;
- Pomorska Spółka Gazownictwa Sp. z o.o. of Gdańsk;
- Wielkopolska Spółka Gazownictwa Sp. z o.o. of Poznań
were merged through the acquisition of all their assets by PGNiG SPV 4 Sp. z o.o. (currently Polska Spółka Gazownictwa Sp. z o.o.) and their transformation into the company’s regional branches.
- Polska Spółka Gazownictwa Sp. z o.o. was appointed the Distribution System Operator and the Natural Gas Liquefaction System Operator until December 31st 2030.
- The volume of gas distributed in 2013 was 10.1 bn m³, up almost 0.2 bn m³ on 2012.
- The consolidated Distribution System Operator has in place standardised:
- Tariff No.1 for Gas Fuel Distribution Services and LNG Regasification Services (approved by the President of the Energy Regulatory Office (URE) on December 17th 2013);
- Distribution Grid Code (approved by the President of the Energy Regulatory Office on December 23rd 2013);
- Inter-Operator Transmission Agreement.
The segment’s core business consists in the distribution of high-methane and nitrogen-rich gas, and small amounts of propane-butane and coke-oven gas, over the distribution network. Polska Spółka Gazownictwa Sp. z o.o. supplies natural gas to households, industrial customers and wholesalers, and connects new customers to both existing and newly constructed network sections. In addition, the segment is responsible for the operation, maintenance, and extension of the distribution network.
The President of the Energy Regulatory Office also granted the company a licence to distribute gas fuel and a licence to liquefy natural gas and regasify liquefied natural gas at LNG facilities until December 31st 2030. Polska Spółka Gazownictwa Sp. z o.o. was appointed the Distribution System Operator and the Natural Gas Liquefaction System Operator until December 31st 2030.
Financial Performance in 2013
The Distribution segment’s revenue is derived from distribution of gas fuel via the network. Its distribution tariffs are subject to approval by the President of the Energy Regulatory Office. Revenue of the distribution company is subject to seasonal fluctuations throughout a year. Transport of gas fuel volumes via the distribution network is at its peak in winter (Q1 and Q4 of each year).
Net profit at the end of 2013 was PLN 556 m.
In 2013, revenue increased by PLN 668 m compared with the year before. The increase resulted from the implementation of a new tariff incorporating costs of gas fuel transmission as well as higher volumes of distributed gas.
In 2013, cash flows from operating activities were PLN 347 m higher than in 2012.
Branches of Polska Spółka Gazownictwa Sp. z o.o.
Tariff Policy
Gas distribution is a licenced activity. This means that the company must gain the President of the Energy Regulatory Office’s approval of its charge rates for gas fuel distribution.
On December 17th 2013, the President of the Energy Regulatory Office approved Tariff No.1 for Gas Fuel Distribution Services and LNG Regasification Services, standardised for the Distribution System Operator and effective from January 1st to July 31st 2014. The tariff is uniform for the whole company, but the charge rates for distribution and regasification services vary by areas covered by its individual branches.
On December 23rd 2013, the President of the Energy Regulatory Office approved the submitted Distribution Grid Code, which provides standardised regulations for distribution of various types of gas fuel transported by the company. The document became effective as of January 1st 2014, replacing the existing regulations for the six gas distribution companies.
Pursuant to a decision of August 26th 2013 (amended on October 14th 2013), the President of the Energy Regulatory Office approved the Compliance Programme − for ensuring non-discriminatory treatment of distribution system users.
Gas Fuel Distribution
In 2013, the operator distributed 10.1 bn m³ of natural gas (measured as high-methane gas equivalent) via the system. The amount exceeds the level recorded the year before (9.9 bn m³) by 0.2 bn m³, or 2%. At the end of 2013, the length of the distribution network with connections was 170.9 ths km. In 2013, the company’s market share in terms of distributed gas volume was 97%, while the number of customers reached 6.77 m.
Capex Projects
In 2013, total Capex ran to PLN 1.14 bn. The focus areas of Capex, which accounted for the largest share of the funds spent, were:
- projects to enhance gas fuel sales through network extension and construction of new connections, which in total amounted to PLN 761.4 m;
- projects to upgrade the gas network. In 2013, the amount allocated to these investments was PLN 229.3 m;
- purchase of new measurement devices (gas meters). In 2013, the amount allocated for this purpose was PLN 141.5 m.
Almost half of the company’s total Capex budget was allocated to extending the gas network and connecting new customers. Funds allocated to the gas network upgrade were the second most important item of the budget. Taking into account the above expenditure and costs incurred on the purchase of gas meters, over 89% of the Capex budget was allocated to network projects.