PGNiG and Vitol SA of Geneva have concluded an agreement providing for the supplies of approx. 550 million cubic metres of gas annually to the cross-border point near Cieszyn. The value of the agreement is estimated at EUR 550m. The supplies are due to start on October 1st 2011 and continue until October 1st 2014.

The gas is to flow through the newly built interconnector, and the quantities contracted by PGNiG will ensure full utilisation of the pipeline's throughput capacity acquired by PGNiG under an open season process held by OGP Gaz-System SA. The new interconnector, which makes it possible to source gas from countries lying south of Poland, will enhance the country's energy security.

The launch of gas supplies through the Cieszyn interconnector is an element of PGNiG's strategy aimed to enhance Poland's energy security by diversifying the sources and directions of supplies.

The agreement is not the first one concluded between PGNiG and Vitol. At present, Vitol is supplying approx. 140 million cubic metres of gas annually to the Lasów cross-border point under an agreement signed in September 2009.

On May 13th 2011, PGNiG signed an agreement with Germany's VNG AG providing for summer supplies of some 50 million cubic metres of gas to the Lasów cross-border point. The agreement is worth some EUR 13m. The supplies are due to start on May 15th 2011 and continue until June 30th 2011.

Thanks to the summer supplies, PGNiG will optimise its portfolio by replacing the more expensive product supplied under the existing contracts for gas imports to the Lasów terminal with cheaper gas supplied in summer months. PGNiG concluded a similar agreement in 2009 (with RWE Supply & Trading ) taking advantage of favourable conditions prevailing in summer, when the prices of gas are at their lowest. The agreement is consistent with the Company's strategy to optimise the terms of gas supplies.

Currently, two other agreements between PGNiG and VNG are being performed. The first one, a ten-year agreement signed in 2006, provides for the supplies of approx. 400 million cubic metres of gas to the Lasów cross-border point, while the other one - concluded for three years in 2008 - provides for the supplies of some 500 million cubic metres of gas per year.

Joanna Zakrzewska

Spokesperson