Capital expenditure in 2021

The Group intends to maintain a high level of capital expenditure in 2021. Spending will focus primarily on projects involving maintenance of hydrocarbon production rates, as well as projects in the exploration for and appraisal of crude oil and natural gas deposits, and development of the power generation segment.

Working towards its strategic objective of increasing total hydrocarbon production, PGNiG will continue to develop and tie in wells in Poland at the Zielona Góra and Sanok Branches. In 2021, PGNiG plans to produce in Poland 3.8 bcm of natural gas (measured as high-methane gas equivalent), and 0.677m tonnes of crude oil and condensate.

PGNiG UN plans to acquire new licence areas by participating in the annual APA licensing rounds and normal licensing rounds, as well as by purchasing new licence areas from other oil companies in areas of interest to the company (farm in) or by swapping shares between its own licences and areas of interest to the company (swap, farm down).

In Pakistan, completion of reservoir testing, drilling and tie-in of additional production wells and capacity expansion of production facilities are scheduled for 2021. In addition, seismic surveys will continue to be carried out, with the results to be used as the basis for drilling exploratory wells in the future.

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In the medium to long term, PGNiG will focus on the performance of obligations under its long-term contracts with respect to minimum offtake volumes (Yamal contract) and contracted LNG volumes. Furthermore, as a result of completion of the Baltic Pipe project, PGNiG will be able to secure contracts for gas supplies from the Norwegian Continental Shelf (from its own fields as well as from imports).

In retail, projects will be implemented in 2021 to develop customer service tools, including the upgrade of BOK 2.0 at further locations, continued development of the eBOK platform, and development and optimisation of the Contact Centre operations. Also, the following projects are planned for 2021: instalment sales of commodity products, expansion of the CNG and LNG infrastructure (CNG stations, LNG bunkering services, cryogenic tankers) and development of a new business line (photovoltaics).

PST will continue to develop its business in key areas of the Group’s strategy, including in particular LNG trading, supply of hydrocarbons from the Norwegian and Danish continental shelf area, and gas trading in on the markets of Central and Eastern Europe.

GSP will carry out works on construction of the Kosakowo storage facility, i.e. five chambers in cluster B, which will be commissioned in 2021.

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PSG intends to maintain the high level of expenditure on network expansion, connection of new customers and reconstruction and upgrading of the gas network. Investment outlays on grid upgrades are to satisfy the growing needs to ensure security of gas supply and operation of the gas network, including pipelines, service lines, as well as points, units and stations.

In the short term, PSG is taking steps to build a gas network and connect new customers, while in the medium term PSG will reconstruct, modernise and build a new gas network to maintain the security and continuity of gas supplies. The company performs multi-faceted analyses on the preparation of gas infrastructure for the distribution of renewable gases.

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In 2021, the PGNiG TERMIKA Group will continue work on its projects, including at the Żerań and the Stalowa Wola CHP plants. In addition, the company will also engage in the construction of a 75 MWe multi-fuel unit and preparations for the construction of a gas-steam unit at the Siekierki CHP Plant, as well as acquisitions in the power and district heat sectors.

The year 2021 will also see implementation of such projects as supply of heat for the town of Rybnik, integration of the heating systems of the Zofiówka CHP plan and the Pniówek CHP plant, as well as intensified acquisition of new customers for central heating and domestic hot water. PGNiG TERMIKA EP is taking steps to expand the heat market, particularly in the large agglomerations of Jastrzębie-Zdrój and Żory.

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In 2021, steps will be taken primarily to ensure efficient implementation of new business products at the PGNiG Group, based on business concepts, implementation plans and financial models prepared in 2020. New projects will also be gradually identified and pursued in key development areas: Renewable Energy Sources (including development of photovoltaic offering and construction of own RES portfolio), alternative fuels and energy efficiency.

For more information, see here.