New reserves of natural gas discovered in the Province of Lublin
The outcome of exploration work carried out by PKN ORLEN has confirmed the existence of additional 500 mcm of natural gas in the Jastrzębiec field near Biłgoraj. Thus, the field’s recoverable reserves rose to 700 mcm. The Company specialists believe that they could be even larger, which is expected to be confirmed by further work on the field.
– Domestic reserves of natural gas, in addition to gas supplies brought through the Baltic Pipe and the President Lech Kaczyński LNG Terminal in Świnoujście, are an important element of Poland's energy security system. New gas discoveries in domestic fields will allow the ORLEN Group to maintain its own gas production in the coming years at close to 20% of the annual gas demand in Poland. Each cubic metre of domestically produced natural gas will not only contribute to our country’s security, but will also provide additional income to local governments in the production areas. For these reasons, ORLEN will continue to invest in hydrocarbon exploration and production. Integration of upstream companies within a strong multi-utility group will allow us to step up our efforts in this area and create the potential for improved performance – said Daniel Obajtek, PKN ORLEN’s CEO and President of the Management Board.
The presence of additional gas reserves in the field near Luchów Dolny (Municipality of Tarnogród, County of Biłgoraj) in Biszcza – Tarnogród licence area No. 36/96/p was confirmed after drilling the Jastrzębiec-4 appraisal well. The well was designed based on the results of geological surveys carried out using 3D seismic imaging. Preliminary estimates put the natural gas reserves in the Jastrzębiec field at close to 700 mcm. However, analysis of the field’s 3D seismic imaging suggests that the gas reserves may in fact be even larger. Further appraisal work, which is currently underway, as well as analysis of the data obtained during the drilling and testing of the new well will provide more detailed information on the volume of the field’s resources.
The Jastrzębiec-4 well, whose annual output can reach approximately 22 mcm of natural gas, will be brought on stream and integrated with the existing infrastructure of the Wola Różaniecka Gas Gathering System. The same will be the case for the Jastrzębiec-5 well, the drilling of which is about to start at the same gas drilling site. Previously, the Jastrzębiec-2 and Jastrzębiec-3 wells, producing 12.5 mcm of natural gas annually, were connected to that gas production facility as a result of exploration work carried out in 2016–2018.
Test results yielded by the well in the Biszcza-Tarnogród licence area confirm the long-term prospectivity of this region of Poland and mean a substantial increase in the domestic gas resources and production. It should be noted that three new gas fields are being developed in close vicinity of the Jastrzębiec field. The company expects that total annual production from the Brzyska Wola, Kulno and Dąbrowica Duża fields, whose development will be completed next year, will reach about 40 mcm.
The discovery and production of gas from more fields not only increases the security of gas supplies, but also improves the financial condition of local governments in the areas where oil and gas reserves are located. This is because hydrocarbon producing companies are required to pay production royalties, whose amount depends on their output. The production royalty is divided between municipalities (60%), counties and provinces (15% each) where the fields are located, and the National Fund for Environmental Protection and Water Management (10%). In 2022, PGNIG paid about PLN 140.5 million in production royalties to local governments.
An additional source of revenue to the municipalities relating to the production activities of the ORLEN Group’s PGNiG is property tax assessed with respect to the sites where hydrocarbon production infrastructure is located. In 2022, the Company paid PLN 72.8m in property tax.