Investment

The core goal of investment in Polska Spółka Gazownictwa sp. z o.o. is development carried out by connecting new customers and increasing the amount of fuel gas distribution services provided, as well as maintaining high standards of services and ensuring the safety and continuity of fuel gas supplies. The company constantly invests in the modernization of its network assets in order to ensure the improvement and maintenance of the gas pipelines’ condition and to guarantee operational safety.
Investment tasks carried out under the plan are assigned to investment groups, the most important of which are:
  • Network expansion and connections,
  • Reconstruction and retrofit of the gas network,
  • Gas meters,
  • Others (equipment for operating the gas network, means of transport for operating the gas network, or IT systems necessary for the management and operation of processes at PSG).

The annual value of the Investment Plan of Polska Spółka Gazownictwa sp. z o.o. amounts to approximately 2.4 billion PLN. Approximately 52% of this amount is invested in the expansion of the gas network, while the remaining part goes to the modernization of the network and the provision of the hardware and IT resources necessary to operate the gas network.

The chart below shows the value of investment outlays in the period 2017–2021 in individual investment groups:

Level of investment outlays, 2017–2021

In 2020, due to the implementation of numerous initiatives aimed at accelerating the connection of new customers and increasing the number and maintaining the high standards of fuel gas distribution services, there was a significant increase in the scope of the investments made.

As part of the implementation of the Investment Plan, in 2020 the construction and modernization of gas pipelines with a total length of 4,404 km was completed, and over 124,000 gas connections were built and modernized, with a total length of 1,283 km.

Length of gas networks built in 2020

A total of 5,687 km of gas pipelines and connections

The effective implementation of such a large scale of line investments, involving the need to acquire the legal deeds to thousands of properties on which gas networks are built (this does not apply to the PSG gas pipelines covered by the Terminal Special Act), is an organizational and legal challenge not only for the company. Such a large scale of construction work can be performed thanks to the involvement of numerous design agencies cooperating with our company, as well as the contractors and suppliers who are selected for these projects in a transparent and competitive tender process. The effective implementation of such a sizable portfolio of investment tasks, constituting public purpose investments, is also possible thanks to the understanding and willing cooperation from the state administration, property owners, road managers, State Forest Directorate, railroad area managers, Water Management Boards, local communities, and other beneficiaries, whose consent for the use of the real estate is obtained at the stage of preparing project documentation.

Our company’s cooperation with local government units from the province level to the poviat and municipal levels is also extremely important, not only in activities resulting from the construction process, but also in terms of assessing the potential of the end-user market and cooperating with industrial investors looking for investment areas fitted with technical infrastructure. Our partner companies in the gas trade who commission us with distribution service are of key importance in acquiring new customers. Long-term investment plans are harmonized within five-year Development Plans, which are agreed on as part of the multi-operator collaboration with the Gas Transmission Operator GAZ-SYSTEM SA, in order to ensure coordination between the investment plans and the development of the transmission system, which is the “backbone” of the national gas system and a source of power for our distribution networks. Development plans are reviewed by province marshals and approved by the President of the Energy Regulatory Office.

Thanks to our company’s cooperation with such a large spectrum of entities, organizations, state administration offices, and local communities, we are able to provide access to the most ecological energy medium—which is fuel gas—while guaranteeing the safety of our infrastructure.

Apart from the energy infrastructure, investment in gas distribution networks involves sewage, water supply, telecommunications and communication infrastructure, and the necessary elements of infrastructure which are essential to meet the communal, living, and economic needs that contribute to the improvement of living conditions and the economic development of the country.

The value of the Investment Plan of Polska Spółka Gazownictwa sp. z o.o. for 2021 is 2.384 billion PLN. The chart below shows the value and proportion of investment outlays in individual investment groups.

In 2021, 2.129 billion PLN has been planned for investment tasks directly related to the gas network, which represents 89% of the total value of the Investment Plan.

Level of investment
outlays in 2021

Investments carried out in projects, i.e., projects co-financed and planned for co-financing from the European Union funds and other investment projects of strategic importance for the company, were included in the Strategic Investment Program.

In 2021 PSG’s Strategic Investment Program includes the following:

  • Nine identified projects for which co-financing agreements have been signed (the total estimated value of investment expenditure is approx. 613 million PLN, with co-financing at a level in excess of 251 million PLN):
    • Gasification of the Szczawnica region and neighboring municipalities
    • Construction of the Lewin Brzeski–Paczków gas pipeline on the Hanuszów–Otmuchów section
    • Construction of the Sandomierz–Ostrowiec Świętokrzyski gas pipeline
    • Construction of a gas network in the Białystok Agglomeration
    • Gasification of towns in the municipalities of Kłobuck, Węczyca Wielka, Opatów, and Krzepice
    • Construction of a gas network in the Warsaw Agglomeration
    • Construction of the Lubienia–Masłów gas pipeline and the Mojecza–Kielce gas pipeline
    • Reconstruction of the Dąbrowa Górnicza–Szopienice gas pipeline
    • Construction of the Witnica–Gorzów Wlkp. gas pipeline and the gas network in Kostrzyn nad Odrą;
In 2020, the implementation of the first Project identified as Gasification of the city of Bielsk Podlaski was completed, with a total expenditure exceeding PLN 21 million and the EU subsidy in the amount of over PLN 5.75 million.
  • Seventeen unidentified projects applying for EU funding under the 2014–2020 financial perspective, carried out in such a way that, with the possible allocation of EU funds, unidentified projects are fully ready and compliant to receive funding (the total estimated value of investment outlays for the above 17 projects is approximately 337 million PLN);
  • Five projects selected for participation in the next EU financial perspective 2021–2027 (the total estimated value of investment expenditure in these five projects is approx. 715 million PLN);
  • Four other projects of a strategic nature for the company which have achieved economic efficiency and are being carried out with the company’s own funds (the total estimated value of investment outlays in these four projects is approx. 141 million PLN).

Planned outlays in 2021 – strategic investment (millions of PLN)

The main goal of the PSG Strategic Investment Program is to ensure the predictability of the results of work in all strategic investment projects covered by the Program (delivering project-related products on time, of the specified quality, and within the accepted budgets) through the following actions:

  • ensuring the overall management of strategic investment projects,
  • ensuring effective communication between related projects,
  • providing a central point of contact for the Program Owner and the Control Committees for individual projects,
  • supervising the implementation of strategic investment projects,
  • developing and implementing standardized management and substantive processes, and
  • managing the knowledge generated and identifying good internal and external practices for conducting and managing investment projects and spreading them within the company.

As part of the Investment Plan, Polska Spółka Gazownictwa sp. z o.o. is also implementing the “Program to Accelerate Investment in the Polish Gas Network, 2018–2022”. The Program proposes the implementation of a number of investments related to both the construction of a high- and medium-pressure gas network, the implementation of which should result in the launch of distribution service in about 300 new municipalities in Poland, and consequently raising the gasification of municipalities to a level of approx. 72%, which is an increase of over 12 percentage points.

The Program also presented proposals for specific legal solutions, including the content of the proposed provisions in selected legal acts, whose introduction has significantly supported or would support the elimination of restrictions in the gasification of Poland. One such action was the introduction of selected PSG investments to the list of investments accompanying projects in the terminal area, in Article 38 of the Act of 24 April 2009 on investments in the liquefied natural gas regasification terminal in Świnoujście. The investment simplifications provided for in the act turned out not only to be an effective tool in the fight against the slowdown and difficulties caused by the pandemic, but most of all they allowed accelerating the preparation of the following 9 investment tasks, planned under said Program:

  • construction of the Kalisz–Sieradz–Meszcze gas pipeline,
  • construction of the Łyszkowice–Słupia–Łódź gas pipeline,
  • construction of the Konopki–Ełk–Mrągowo gas pipeline,
  • construction of the Kolnik–Elbląg gas pipeline,
  • construction of the Dworzysko–Chojnice gas pipeline,
  • construction of the Bytów–Chojnice gas pipeline,
  • construction of the Tulce–Nekla gas pipeline,
  • construction of the Witkowo–Września gas pipeline, and
  • connection of a high pressure gas pipeline in Zambrów.

The total value of estimated investment outlays related to the implementation of the tasks listed above is nearly PLN 1.34 billion. In 2020, expenditure was incurred in the total amount of PLN 14.57 million. As for the project performance, routes have been mapped out for all gas pipelines, and applications have been submitted for a decision on environmental conditions, and for three of them, such decisions have already been obtained. It should also be noted that for one of the tasks (Zambrów), an application was submitted at the end of the year for a decision on the location of the terminal investment. 

Expansion of the high-pressure distribution system as part of the previously mentioned nine network investments is the only measure minimizing the negative impact of limits on exit points from the transmission system. The expansion of the high-pressure distribution system will enable the transmission of significant volumes of gas between certain areas of the distribution network supplied from different exit points. Moreover, the high-pressure gas distribution networks supplying the areas with a gas shortage will be able to become a source of power for municipalities that have not been supplied with gas so far, and where the gas networks in question will be located.

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