PGNiG: Intention to sign agreement on maintaining emergency gas stocks with Government Agency for Strategic Reserves

The Management Board of Polskie Górnictwo Naftowe i Gazownictwo S.A. (“PGNiG”, the “Company”) announces that on March 4th 2022 it passed a resolution to approve the execution by the Company of an agreement on engaging the Government Agency for Strategic Reserves (“GASR”) to perform tasks related to maintaining emergency stocks of natural gas (the “Agreement”).

Pursuant to Art. 70c.3.1 of the Act of February 16th 2007 on Stocks of Crude Oil, Petroleum Products and Natural Gas, and on the Rules to Be Followed in the Event of Threat to National Fuel Security or Disruptions on the Petroleum Market (the “Act”), upon execution of the Agreement the GASR will purchase from PGNiG, for the State Treasury, natural gas held as emergency stocks at the price specified in the Act, and will assume PGNiG’s rights and obligations under storage contracts with the storage system operator with respect to emergency stocks.

The price of gas sold for the purpose of the GASR performing the tasks related to maintaining emergency gas stocks will be the price specified in the Act, equal to the arithmetic mean of settlement prices in contracts for delivery in the second and third quarter of 2022, quoted in the last 30 calendar days immediately preceding the date of transfer of ownership of natural gas and published on the website of the company operating the Polish Power Exchange. Pursuant to the Act of January 26th 2022 on Special Solutions for the Protection of Gas Fuel Customers in View of the Situation on the Gas Market, GASR’s expenditure on the activity referred to in Art. 70c.3.1 of the Act is capped at PLN 6bn in 2022.

Energy companies operating in Poland, whose business consists in gas trading with foreign partners, and entities importing natural gas are required to maintain emergency stocks of natural gas in an amount equal to at least 30-day average daily imports.

The Company will announce the execution of the Agreement in a separate current report.