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Commercial activity in Poland

The segment’s core business is trading in natural gas in Poland.

On 1 August 2014, an organizational change took place at the PGNiG Group involving separation of wholesale gas sales, which remained at PGNiG, from retail sales and the simultaneous transfer of commercial retail customer to the new company called PGNiG OD.

Natural gas sales in Poland outside the PGNiG Group (including gas exports from Poland)

mcm 2017 2016 2015 2014 2013
High-methane gas (E) 23,075 20,435 19,557 15,543 13,555
Nitrogen-rich gas (Ls/Lw as E equivalent) 701 671 611 514 519
TOTAL (measured as E equivalent) 23,776 21,106 20,168 16,057 14,074
PGNiG 16,159 13,734 12,415 12,834 13,555
PGNiG OD 7,617 7,245 7,481 3,209
PST 127 272 14 5

PGNiG Group’s customer base

mcm 2017 2016
Households 4,065 3,913
Retail, services, wholesale 1,775 1,475
Nitrogen plants 1,981 1,798
Power and heat plants 900 607
Refineries and petrochemical plants 2,795 1,338
Other industrial customers 3,028 2,468
Exchange 8,515 9,141
Exports from Poland 728 370
Total sales outside the Group 23,787 21,109

Wholesale market

Gas imports

In 2017, PGNiG purchased natural gas mainly under the long-term agreements and contracts as well as short-term gas supply agreements with European suppliers specified below:

  • Contract with OOO Gazprom Export for sale of natural gas to the Republic of Poland, dated September 25th 1996, effective until 2022 (the Yamal Contract);
  • Contract with Qatar Liquefied Gas Company Limited (3) for sale of liquefied natural gas, dated June 29th 2009, effective until 2034 (the Qatar Contract).

Imports of natural gas to Poland in 2012–2017 (bcm)

Purchases of imported gas rose to 13.7 bcm

Gas purchases from the Eastern direction fell by 0.5 bcm compared with 2016. Gas purchases from the Western direction increased to 2.3 mcm. LNG supplies also increased, to 1.7 bcm.

In 2017, purchases of imported gas rose to 13.7 bcm. Gas purchases from the Eastern direction fell by 0.5 bcm compared with 2016. Gas purchases from the Western direction increased to 2.3 mcm. LNG supplies also increased, to 1.7 bcm.

PGNiG actively supports all efforts leading to the construction of the infrastructural connection with an annual capacity of approximately 10 bcm which would give Poland direct access to gas from North Sea fields. In 2017, PGNiG took part in the 2017 Baltic Pipe Open Season Procedure announced by Gaz-System and the Danish transmission system operator Energinet, and placed a binding bid to book transmission capacity from October 1st 2022 to September 30th 2037 that would enable it to bring gas from the Norwegian Continental Shelf to Poland. A positive result of the economic test carried out by the operators and confirmation of the capacity allocation to PGNiG led to the signing of transmission agreements with the operators in January 2018 (more information on the Baltic Pipe project).

An annex to the Regasification Agreement with Polskie LNG SA was signed in 2017, increasing the long-term regasification capacity booking by PGNiG at the Świnoujście LNG Terminal to 100%. The annex runs from January 1st 2018 to January 1st 2035 and will enable gas deliveries under the supplementary agreement with Qatargas and potential purchases of additional LNG under spot and short- to medium-term contracts.

Renegotiation of price terms under the contract with OOO Gazprom Export

In 2017, PGNiG continued its efforts to revise the price terms under the Yamal Contract as part of the procedure formally launched on November 1st 2014. Since no agreement was reached with the supplier, on May 13th 2015 PGNiG instigated arbitration proceedings, in accordance with the contract. The dispute concerns bringing the contract in line with the current conditions on the European natural gas market. As at the date of preparation of this report, the proceedings before the Arbitration Court were pending. The company expects that the dispute will be settled in the first half of 2018. The fact of referring the dispute to the Arbitration Court does not preclude commercial negotiations and earlier amicable settlement with the supplier.

Despite the failed attempt to renegotiate the price terms of the Yamal Contract, on November 1st 2017 PGNiG again requested PAO Gazprom/OOO Gazprom Export to renegotiate the price terms of gas supplies. The Russians submitted their own renegotiation request on December 7th 2017, which the Company believes was groundless and ineffective as it failed to meet the formal requirements set out in the Yamal Contract. The parties had failed to reach an agreement by the date of this report.

LNG supplies

On March 14th 2017, PGNiG and Qatargas signed a Supplemental Agreement to the contract for sale of liquefied natural gas of June 29th 2009. Under the agreement, expiring on June 30th 2034, the shipments of LNG from Qatar to Poland will be doubled as of 2018. The total volume of LNG supplied under the long-term contracts with Qatargas will increase to 2m tonnes in 2017 (equivalent to about 2.7 bcm of gas), and in 2018–2020 to 2.17m tonnes per year (equivalent to about 2.9 bcm of grid gas).


In 2017, PGNiG received three spot LNG cargoes

PGNiG received three spot LNG cargoes, contracted through the LNG trading office run by PST in London. The first cargo of ca. 150,000 cubic metres of LNG from the Sabine Pass terminal in the US was delivered by Cheniere Marketing International. Approximately 205,000 cubic metres of LNG was purchased from Qatar Liquefied Gas Company Limited (2) on a spot basis. The last spot cargo of around 140,000 cubic metres of LNG received in 2017 was sourced from Norway and delivered by Statoil ASA. The PGNiG Group purchased a total of ca. PLN 500,000 cubic metres of LNG on the spot market in 2017, equivalent to approximately 3.33 TWh or approximately 290 mcm of natural gas after regasification.

In an effort to further diversify its gas supply sources, in November 2017 the Group signed a five-year contract for a total of nine LNG shipments with Centrica LNG Company Limited, to be delivered from the Sabine Pass liquefaction terminal in the US. The contract will enter into force in 2018, with LNG to be delivered on a DES (Delivery Ex Ship) basis. This is the first medium-term contract concluded by PST’s LNG trading office in London.

Sales of gas

Wholesale gas tariffs were partly regulated until September 30th 2017. In practice, customers have been charged market prices. Prices in contracts already signed and those being negotiated are based on a uniform objective pricing mechanism with no discretionary criteria, which guarantees equal treatment of all customers. Settlements with customers are based on pricing formulas or fixed prices linked to exchange indices. In 2017, the largest amounts of gas in Poland were sold to industrial customers. The largest Polish customers in this group include Grupa Azoty SA, PKN Orlen SA, Polska Grupa Energetyczna SA, KGHM Polska Miedź SA, Grupa Kapitałowa ArcelorMittal, and Grupa Lotos SA.

In 2017, sales on the Polish Power Exchange (PPX) accounted for the largest portion of the PGNiG Group’s total gas sales.

The table below presents the volumes of gas sold by PGNiG in 2017 and 2016 on the PPX’s Commodity Futures Instruments Market, Day-Ahead Market, and Intraday Market (data by delivery dates):

Volume (TWh) 2017 2016
Total – Commodity Futures Instruments Market (natural gas) 75.2 78.7
Total – Day-Ahead and Intraday Market (natural gas) 17.2 19.1
TOTAL – Polish Power Exchange 92.4 97.8

The volume of gas sold by PGNiG SA on the PPX in 2017 decreased by approximately 5.4 TWh year on year.

To meet the obligation to sell 55% of the gas fed into the national transmission system through the exchange market, PGNiG has adopted a pricing policy covering all natural gas-linked instruments on PPX, allowing it to offer natural gas to other market participants at prices corresponding with those on deregulated wholesale, exchange and OTC markets in Western and Northern Europe. The applied pricing policy has made the commodity exchange an attractive gas trading platform.


In the business customer segment, PGNiG’s main competitors operating directly in Poland include PGE Polska Grupa Energetyczna SA, DUON (Fortum Holdings), Hermes Energy Group SA, RWE Polska SA, TAURON Polska Energia SA, and PKN ORLEN SA. Competitors step up gas sales by strengthening their sales force, increasing the flexibility of their offering and price hedging mechanisms, as well as by bundling gas and electricity.

In the reporting period, PGNiG’s sales of high-methane grid gas in Poland were 165.2 TWh, up 15.1% on 2016 (143.5 TWh). On the one hand, the higher sales volume resulted from stronger market demand, but on the other, the increase was driven by competitors’ declining share in gas imports. In 2017, competitors’ net gas imports fell by 8.2 TWh, or 42.6%, year on year.

Gas exports

In 2017, as part of its cooperation with the ERU Group, PGNiG sold 728 mcm of gas on the Ukrainian market, with the total volume of gas sold to Ukraine from August 2016 having reached 1.1 bcm. In April 2017, the two companies were jointly awarded a contract for the supply of natural gas to the Ukrainian transmission and storage operator Ukrtransgaz, for its own needs. The total volume of natural gas to be supplied under the contract is 195 mcm.

In October 2017, PGNiG concluded an agreement with Ukrtransgaz for the transmission of natural gas in the territory of Ukraine, which will enable the Company to use Ukrainian gas networks and storage facilities. In 2017, PGNiG sold gas to customers in Ukraine via the Hermanowice point on the Polish-Ukrainian border located before the entry point to Ukrtransgaz’s transmission system. The agreement is a next step towards expanding PGNiG’s business in Ukraine, providing new opportunities for cooperation with Ukrainian trade partners.

Sale of electricity

On the electricity market, PGNiG is engaged primarily in wholesale trading. Total sales of electricity to trading companies and on the Polish Power Exchange accounted for more than 90% of total electricity sales in 2017. Total trading volume in 2017 was more than 6.8 TWh.


Sales of electricity by PGNiG S.A. GWh %
End customers 6.7 0.1
Trading companies 948.6 14.0
Balancing market 492.8 7.3
Exchange 5,170.4 76.2
Producers 164.1 2.4
TOTAL 6,782.6 100.0


In 2017, PGNiG was engaged in wholesale trading in electricity and related products in Poland and Germany. In Poland, the Company traded on the OTC market and on the PPX. In Germany, the Company traded in spot contracts on the European Power Exchange as part of cross-border electricity trading, and in futures contracts on the European Energy Exchange. PGNiG also provided services under a commercial balancing agreement to PGNiG OD, PGNiG TERMIKA, and new companies in the PGNiG TERMIKA Group: Energetyka Przemysłowa and Energetyka Rozproszona. PST traded in electricity on the German market as part of exchange (EEX) and OTC transactions.

Retail market

The focus of PGNiG OD’s business is sale of natural gas (high-methane and nitrogen-rich gas), electricity, compressed natural gas (CNG), and liquefied natural gas (LNG).

Sources of gas

PGNiG OD purchases high-methane gas on the PPX, under a bilateral contract with PGNiG for delivery of gas to a virtual trading point in the transmission network operated by OGP GAZ-SYSTEM, and under a bilateral contract with PGNiG for delivery of gas to a physical trading point in Słubice. LNG is purchased under a bilateral FCA framework agreement with PGNiG and under a bilateral agreement with PGNiG. Nitrogen-rich Lw-type and Ls-type natural gas, produced from Polish assets, is purchased under an agreement with PGNiG.


The largest share in the global volume of high-methane gas purchases was attributable to transactions on PPX.

Gas supply contracts with PGNiG OD are governed by the Contracts Policy, which defines the rules on contracts with the individual customer groups, the division of responsibilities and the method of reporting wholesale trading activities. Given changes on the retail gas fuel market and the MIFID II requirements, work began to adjust the Contracts Policy to the current market conditions and to separate contracts with customers exempt from the tariff approval requirement. The remaining gas volumes covered by special price offers are hedged according to the level of utilisation of the price offers, to mitigate the risk that gas procurement costs would not correspond with current wholesale prices.

As regards bilateral contracts for the purchase of gas fuel delivered to a physical and virtual point, PGNiG OD uses contracts with PGNiG, providing an option to depart from the fixed price of purchased gas using pricing formulas that link the final price of gas to the prices of instruments traded on the PPX.

Sales of gas

PGNiG OD’s customer base includes consumers and customers who are not consumers. Group 1-4 retail customers purchase gas used mainly for cooking and for water and space heating or in production process. Business customers buy gas both for technological purposes as well as for heating. An analysis of gas fuel customers showed that in 2017 small and medium enterprises represented the largest proportion of all customers. The opposite is true for sales volumes, with the largest customers purchasing the largest volumes of gas. The largest group of customers by number are businesses operating in the retail and services segment, whereas industrial customers lead in terms of gas volumes received.


Based on PGNiG OD estimates, in 2017 there were over 60 gas suppliers on the market who actively competed for domestic and business customers, mainly by offering competitive gas prices and gas and electricity bundles as well as by cross selling products and services.

In 2017, the activity of competitors combined with growing customer awareness resulted in a greater market pressure on PGNiG OD to reduce gas prices and negotiate contract terms on a case-by-case basis. However, the trend to win back B2B customers that began in 2016 continued into 2017, and the company reported a strong order book for the gas year 2018. The net order book was again positive year on year.

Elimination of tariffs

The key project in 2017 was the preparation for the tariff elimination process, that is the process of abolishing the obligation to submit for approval tariffs for institutional customers. In the process, suppliers were in particular required to prepare new agreement templates, general terms and conditions of an agreement and price lists, as well as to plan and conduct an information campaign addressed to consumers.

Sales of CNG and LNG

The pricing policy for both LNG supplies and regasified LNG supplies uses prices obtained at the Świnoujście LNG terminal, based on the natural gas prices quoted on the Polish Power Exchange. Offered prices of the finished product are linked to the ordered LNG volume and distance from the Świnoujście gas terminal. In 2017 new approach regarding pricing of CNG was introduced, based on correlation with PPX pricing.

The volume of LNG supplies to business customers was about 5 thousand tonnes in 2017. The volume of CNG sold in 2017 totalled approximately 16 mcm.

Sale of electricity

PGNiG OD’s customer base includes consumers and customers who are not consumers who have concluded comprehensive service contracts for the supply of electricity or contracts for the sale of electricity. As at the end of 2017, PGNiG OD’s base of retail customers on dual fuel (electricity and gas) plans comprised consumer accounts (91%) and non-consumer accounts (9%).

According to the URE data, the number of customers who switched their electricity suppliers in 2017 was around 99,000, including a little more than 84,000 households (G tariff groups), compared with over 86,000 a year earlier, including more than 71,000 households (G tariff groups).

Trade abroad

Through PGNiG Supply and Trading GmbH (wholesale) and PST Europe Sales GmbH (retail sale), the PGNiG Group is also developing its natural gas business (both wholesale and sales to end users) in Germany and Austria.

Gas sales outside the PGNiG Group (excluding gas exports from Poland)

mcm 2017 2016 2015 2014 2013
High-methane gas (E) 2,186 2,384 2,039 1,745 1,378
Nitrogen-rich gas (Ls/Lw as E equivalent)
TOTAL (measured as E equivalent), including: 2,186 2,384 2,039 1,745 1,378
PST 2,186 2,384 2,039 1,745 1,378

Customer base

mcm 2017 2016
Households 48 51
Other industrial customers 35 57
Retail, services, wholesale 1,303 1,460
Exchange 800 816
Total sales outside the Group 2,186 2,384

Exchange and OTC wholesale trading

PST is an active player on organised markets (exchanges) and in OTC trading. It trades with over 100 counterparties under EFET or similar standardised contracts. The company operates in Germany and its neighbouring countries, Austria and the Netherlands. PST registered for trading on the UK gas market (NBP) and launched its operations there in August 2016. PST has also registered its activity in the Czech Republic and Poland. PST is also a registered supplier on the Danish and Slovak markets. PST is a market maker on the PEGAS exchange for the GASPOOL gas hub market area.

PST commenced commercial activities on the global LNG market through its branch in London, opened in February 2017. The branch contracted its first delivery with Cheniere Energy. It was the first LNG delivery from the US to Northwestern Europe. In addition, the PST London Branch concluded a medium-term contract with Centrica LNG Company Limited.

In 2017, PST and PST Europe Sales GmbH sold a total of 49.9 TWh of gas and 5.1 TWh of electricity in exchange and OTC transactions. Poland was PST’s largest gas sales market, with a 52% share in total sales volume. The shares of gas sales on the German and Dutch markets were 29% and 19%, respectively. Electricity is sold mainly in Germany (a 99% share in sales volume) with a negligible share of sales in Austria (1%).

PST’s sales structure by product and volume


PST’s sales structure by country and volume


Retail sales

Over 2017, PST and its subsidiaries signed almost 36,000 new contracts. At the end of 2017, the number of customers increased by 39% year on year, to over 44,000.

Key services provided to PGNiG Group entities

PST’s key contracts effective in 2017 included contracts for the management of commercial storage capacity for own needs at gas storage facilities in the Netherlands (with a working capacity of 250 GWh) and Austria (with a working capacity of 17 GWh). The objective of storage is to optimise the trading portfolio and accommodate growing end-user demand for gas in winter. Under its current contracts, PST supplies natural gas to PGNiG on the Polish-German and Polish-Czech borders, thus securing diversification of supply sources. PST also has in place a contract with PGNiG UN for the purchase of gas produced from the Norwegian Skarv field as of 2013, from the Vale and Morvin fields as of 2015, and from the Gina Krog field as of July 2017.


The Trade and Storage segment uses for its own needs the working capacities of the Wierzchowice, Husów, Strachocina, Swarzów and Brzeźnica underground gas storage facilities, as well as the Mogilno and Kosakowo underground cavern facilities. A part of the working capacity of the Mogilno facility which was made available to GAZ-SYSTEM is not a storage facility within the meaning of the Polish Energy Law. The capacities of gas storage facilities are managed by GSP, conducting activities in the following two core areas:

  • Regulated activities comprising the provision of gaseous fuel storage services at storage facilities owned by PGNiG, as well as operation of the Mogilno and Kosakowo underground gas storage caverns;
  • Non-regulated activities comprising the provision of services related to design, construction and extension of underground gas storage facilities.

Under an outsourcing agreement, GSP provides storage services at underground high-methane gas storage facilities owned by PGNiG.

Short-term peak fluctuations in demand for natural gas are balanced by supplies from the Mogilno and Kosakowo facilities, where gas is stored in worked-out salt caverns. The capacities of the Wierzchowice, Husów, Strachocina, Swarzów and Brzeźnica underground gas storage facilities are used to balance out changes in demand for natural gas in the summer and winter seasons, to meet the obligations under take-or-pay import contracts, to ensure the continuity and security of natural gas supplies, and to meet the obligations under gas supply contracts with customers.

GSP, in its capacity of the storage system operator, provides gas fuel storage services to storage facility users under standardised procedures, on a non-discriminatory, equal-treatment basis, so as to ensure the most efficient use of the storage capacities. Storage services are provided under standard storage service agreements (SSSA).

To ensure equal treatment of storage service users, SSSAs are concluded based on GSP’s Rules of Storage Services and the gas fuel storage tariff. GSP’s services are provided using the following Storage Facilities (SF) and Groups of Storage Facilities (GSF):

  • Kawerna GSF (comprising the Mogilno CUGSF and Kosakowo CUGSF, located in worked-out salt caverns),
  • Sanok GSF (comprising the Husów UGSF, Strachocina UGSF, Swarzów UGSF and Brzeźnica UGSF, located in partly depleted gas reservoirs),
  • SFG (comprising Wierzchowice UGSF).
Service Terms of storage services Facility Number of packages/flexible packages
Long-term On a firm basis Wierzchowice UGSF 3,863
Kawerna SFG 6,235
Sanok SFG 2,579
On an interruptable basis Wierzchowice UGSF 9,303
Kawerna SFG 1,368
Sanok SFG 8,941
Short-term On an interruptable basis Kawerna SFG
Total 32,289

As at December 31st 2017, GSP had provided a total of 32,289 long-term storage capacity packages, including 12,677 packages of services provided on a firm basis and 19,612 packages on an interruptible basis. As at December 31st 2017, 97% of the storage capacities were reserved for PGNiG SA, 2% for external customers, with the remaining 1% of total capacities idle (408 short-term storage capacity packages on an interruptible basis at the Kawerna SFG).

Ticketing service

In response to market expectations, in early February 2017 PGNiG added to its offering a ticketing service which allows gas importers and traders to meet their gas-stocking obligations in accordance with the applicable Polish regulations. The ticketing service supports efficient use of storage capacities by natural gas market players, while importers of natural gas to Poland do not have to collect and maintain emergency gas stocks in storage facilities on their own.

PGNiG has entered into agreements for the provision of the ticketing service with 11 companies. The agreements entered into force on October 1st 2017. The total volume of gas stocks maintained by PGNiG for other entities is close to 370 GWh (approximately 33 mcm). PGNiG maintains gas stocks for the above entities, on a contract basis, in GSP’s storage facilities, in which PGNiG previously leased appropriate storage capacities and injected gas.

Third-party access (TPA) storage capacities

As at December 31st 2017, the PGNiG Group had a total working storage capacity of 2,985.35 mcm, of which 2,942.85 mcm was made available on a TPA basis or to the Gas Transmission System Operator GAZ-SYSTEM under a long-term contract. 37.19 mcm was made available under a short-term contract. 5.23 mcm of Kawerna’s working capacity is allocated for the Mogilno and Kosakowo cavern facilities’ own needs.

Total working capacities and TPA working capacities

Working storage capacities (mcm) TPA working storage capacities (mcm) TPA working storage capacities (GWh)
2017 2016 2017 2016 2017 2016
Kawerna SFG 735 714 730 709 13,166 13,166
Wierzchowice UGSF 1,200 1,200 1,200 1,200 8,011 7,774
Sanok SFG 1,050 1,015 1,050 1,015 11,520 11,137
Total 2,985 2,929 2,980 2,924 32,697 32,077
* Converted to gas with a calorific value of 39.5 MJ/cm.