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Poland : Five companies execute shale gas exploration agreement
Publish Date : 06-Jul-2012
The framework agreement executed on July 4th 2012 between five Polish companies, i.e. PGNiG, ENEA, KGHM Polska Miedz, PGE and TAURON Polska Energia, will help accelerate shale gas exploration work. In accordance with the agreement, estimated expenditure on gas exploration, appraisal and production at the first three pad locations (Kochanowo, Czestkowo and Tepcz) will amount to PLN 1.72bn. First gas produced as part of the joint project may be expected to flow in 2016.
Under the agreement, joint work will be conducted on a part of the Wejherowo licence held by PGNiG, and specifically on the Kochanowo, Czestkowo and Tepcz pads (the KCT project), where preliminary surveys and analyses have confirmed the presence of shale gas. The area in the Wejherowo licence covered by the cooperation agreement is ca. 160 sq km. Each of the investors will have a specific percentage share in the KCT project budget, with estimated budget expenditure of up to PLN 1.72bn. Each party will be guaranteed involvement in the process of supervising the project implementation by participating in the operational committee appointed for that purpose.
In accordance with the agreement, PGNiG will be the licence operator throughout the exploration and appraisal phase. Assuming that the work proceeds in line with the preliminary schedule and ends in a success, production launch may be expected in three years\' time. At the production stage, operatorship will be entrusted to a special purpose vehicle which will hold the production licence.
Mikolaj Budzanowski, Minister of the State Treasury
This cooperation between mining and power companies will enable us to leverage economies of scale, thanks to which we will sooner know the productivity of our deposits. It is also the right way to a long-term goal: looking for new ideas and developing innovativeness. If we fail to do that, we will not meet the challenges inherent in the EU climate policy and the related necessity to limit CO2 emissions. Poland\'s economy as a whole may benefit from shale gas, and for the Polish power industry it is a chance to become modern and competitive against the European background. By engaging in gas exploration now, the power companies are securing access to less expensive Polish gas supplies for their gas-fired power plants which are currently under construction.
Grazyna Piotrowska-Oliwa, President of PGNiG SA
With today\'s agreement we have advanced on the road to reaching our strategic objective of enhancing the independence and competitiveness of Poland\'s economy. Production of shale gas will facilitate ensuring stable energy supplies at prices acceptable by the market. Combining the economic potential of our partners with PGNiG\'s resources in the form of licences, expertise and experience of our employees, guarantees our common success.
