43. Events Subsequent to the Balance Sheet Date
Execution of annex to contract with KGHM Polska Miedź S.A.
On January 30th 2014, an annex was signed to the general gas supply contract of July 30th 2010 (the "Contract”), entered into between PGNiG S.A. and KGHM Polska Miedź S.A. of Lubin (“KGHM”).
The Contract provides for sale of natural gas to be used as a power generation fuel in two 45MWe combined-cycle gas turbine (CCGT) units, and will remain in force until June 30th 2033. Under the annex, the annual volume of gas supplies was reduced from 266m cubic metres to 41.5m cubic metres. The change follows from a decision by KGHM to reduce the output of co-generated electricity and heat due to changes in the co-generation support mechanisms in 2013 and low prices of electricity. The estimated value of the annexed Contract is approximately PLN 830m. The parties may restore the original supply volume in future if and when the regulatory and macroeconomic environment improves.
The parties also signed annexes to the three other contracts for gas fuel supplies to KGHM, including:
- the contract of September 25th 2001,
- the contract of January 4th 1999, and
- the contract of October 1st 1998.
The annexes changed only the duration of the contracts, from an indefinite term to the period until June 30th 2033. The contracts secure long-term trading partnership with one of PGNiG's most important customers for nitrogen-rich gas. The estimated aggregate value of the three contracts over their entire term is approximately PLN 2.8bn.
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