"We are pleased with the high EBITDA and the net profit, it has never been so high in the history of our Group. Growing oil and gas prices, markedly higher than in 2016, translated into excellent financial results posted by our upstream segment,” said Piotr Woźniak, President of the Management Board of PGNiG SA. “We are actively implementing our strategy, we sold over 2.5 bcm more gas than the year before,” the President of PGNiG SA added.

Higher commodity prices – gains for Exploration and Production

Driven by growing oil and gas prices, sales of the Exploration and Production segment increased by 16%, to PLN 6.12bn. The segment’s EBITDA rose by 75%. In 2017, the Group’s natural gas production reached 4.54 bcm, up by 2% on 2016.

Sales of gas up by over 2.5 bcm

Total gas sales outside the PGNiG Group increased by 26.79 bcm, or 10%, compared with 2016. The volume of wholesale gas sales expanded by 55%. Sales of gas to retail customers grew by almost 0.5 bcm. However, higher oil prices had a negative impact on the cost of gas procurement from the long-term import contracts. Lower contribution of the Trade and Storage segment to generated EBITDA was caused by the segment’s non-current asset impairment of PLN 364m.

Higher gas distribution volumes

Revenue of the Distribution segment totalled nearly PLN 4.94bn, slightly above the 2016 figure. The volume of distributed gas was over 7% higher on the preceding year, at 11.65 bcm what confirms that the natural gas market in Poland is growing. Revenue from distribution services improved by 5%, while the segment’s operating costs rose, too.

More heat and electricity

In the Generation segment, revenue climbed to PLN 2.25bn, up by 3%, while the segment’s EBITDA rose by 11%. The volumes of heat and electricity sold (own production) were up by 6% and 8%, respectively, on the previous year.

A good year

Our successful initiatives in the trading area brought new contracts with strategic clients, including ArcelorMittal, Euroglas, Grupa Azoty, KGHM and Lotos. Natural gas sales to Ukraine in 2017 reached almost 730 mcm (the total figure since the beginning of August 2016 exceeded 1 bcm). PGNiG SA signed 11 ticket agreements for natural gas storage services. The number of customers who took advantage of the promotional offers such as ‘Prąd i Gaz’, ‘Gazek’ and ‘Stale Niska Cena’ amounted to 100,000.

A total of 1,522 road tankers reached customers receiving LNG in this way in 2017, and since June 2016 their number has reached almost 2,500. Under new contracts with public transport providers in Rzeszów, Sanok, Tarnów and Tychy, PGNiG will supply compressed natural gas (CNG) for next 150 buses.

Major events for the PGNiG Group in 2017:

• Binding contracts for booking of the capacity in the Baltic Pipeline with Danish and Polish transmission system operators with an estimated value of PLN 8.1bn.
• Reservation of full regasification capacity at the LNG Terminal in Świnoujście.
• Additional agreement to the long-term contract with Qatargas, increasing supplies from Qatar. The volume of LNG imports up to over 2m tonnes per year.
• 5-year agreement for regular supplies of LNG from the US signed with Centrica LNG Company Limited.
• Spot contracts concluded, enabling import of liquefied natural gas from Norway and the US (first supply of LNG from the US to Northern Europe).
• Ratings by renowned agencies: BBB- assigned by Fitch, and Baa3 affirmed by Moody’s, in both cases with a stable outlook.
• New Strategy for 2017–2022 with an outlook until 2026.
• LNG trading office opened in London.
• Launch of oil and gas production from the Gina Krog field in Norway.
• Payment of PLN 1.156m in dividend (PLN 0.20 per share).

• Abolition of price regulation for business customers.
• Beginning of a project to build a new 497 MWe CCGT unit at the Żerań CHP Plant in Warsaw.
• In the R&D area, very good results of a pilot coal bed methane extraction programme in Gilowice.