PGNiG SA plans to build the first four storage chambers, with the capacity of 100 million cubic metres, by the end of 2014. The aggregate value of the KPMG Kosakowo project is approximately PLN 667.1m, including PLN 93.4m in EU funding.

The EU funds will be used to cover the cost of building the leaching unit with the pipeline system for brine discharge, surface gas infrastructure, four boreholes, and four storage chambers; the EU funding will also be used to finance the cost of cushion gas.

In September 2010, the leaching process commenced in the first two storage chambers, with completion scheduled for the end of 2012. The next two chambers will be constructed in 2014. The entire project, which involves construction of ten storage chambers with a total working capacity of 250 million cubic metres, and the necessary surface infrastructure, will be placed in service in 2021. Gas will be stored in the leached salt caverns.

The project forms part of the larger storage capacity extension programme, one of the pillars of PGNiG SA's strategy. The increased capacity of the gas storage facilities will contribute to strengthening Poland's energy security and support PGNiG's flexibility in responding to any disruptions in natural gas supplies.

The key objective of KPMG Kosakowo will be to enhance security of the Polish gas system by ensuring uninterrupted gas supplies at the time of peak demand, i.e. in the autumn and winter season.

KPMG Kosakowo, after it has been connected to the national gas system, will guarantee reliable gas supplies to the Gdańsk-Gdynia-Sopot agglomeration and beyond, as its coverage will correspond to that of Pomorska Spółka Gazownictwa of Gdańsk, a gas distribution company operating in the provinces of Gdańsk and Bydgoszcz and, partially, in the province of Olsztyn.  The absence of underground gas storage sites presents a major obstacle in the development of gas industry in the region.

PGNiG SA's development strategy until 2015 provides for considerable extension of its underground storage capacities from the existing 1.6 billion cubic metres to over 3 billion cubic metres. The related projects will cost approximately PLN 3.5bn.

In 2010, the European Commission granted PGNiG SA's application for financial support and awarded co-financing for four underground gas storage projects in Poland for a total amount of EUR 390.5m (ca. PLN 1.54bn). The funds must be used before June 2015.

In the coming years, PGNiG plans to construct a total of nine underground storage facilities. In the case of four of them, 25-30% of the expenditure will be covered with the EU funds. PGNiG SA will use the funds to extend four underground storage facilities, mainly for the purposes of storing high-methane gas, in Strachocina (Rzeszów region), Wierzchowice (Silesia) and Mogilno (Bydgoszcz region), as well as to build a new storage facility in Kosakowo near Gdańsk.

The largest project is the one involving the extension of the Wierzchowice facility, which is scheduled for completion in late 2011.  The EU grant awarded to the Wierzchowice project is PLN 503.6m, with the project's total gross expenditure estimated at PLN 1.96bn. Following completion of the project, which was launched in 2008, the storage facility's working capacity will have increased from 0.575 billion cubic metres to 1.2 billion cubic metres.

Joanna Zakrzewska

Spokesperson