Investment

The core goal of investment in Polska Spółka Gazownictwa sp. z o.o. is ensuring the safety and continuity of fuel gas supplies and 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. 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 3.1 billion PLN. Approximately 63% 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 2019–2023 in individual investment groups:

Level of investment outlays, 2019–2023

In 2022 a significant increase in the scope of the investments made was maintained.

As part of the implementation of the Investment Plan, in 2022 the construction and modernization of gas pipelines with a total length of 4,438 km was completed, and over 118,000 gas connections were built and modernized, with a total length of 1,170 km.

Length of gas networks built in 2022

A total of 5,608 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, is an organizational and legal challenge not only for the company. In order to simplify and accelerate the process of preparing some of the PSG investments, the legislator included them in the Act of 24 April 2009 on investments in the liquefied natural gas regasification terminal in Świnoujście (hereinafter the special act). As a result, 28 PSG gas pipelines (9 in the 2019 amendment and 19 in the next amendment from 2021) were added to the list of investments supporting investments in the terminal, and the possibility was introduced that the Company can make connections and build gas pipelines to generating units or cogeneration to produce electricity or heat. After more than two and a half years of experience with the implementation of that regulation, the PSG investment preparation process has been shortened in extreme cases from more than 12 years and three months to 2.5 years.

Independently of the simplifications introduced, construction work of such significant level of difficulty requires cooperation with engineering companies, construction companies and providers selected through transparent, competitive tenders. Effective implementation of these public purpose investments is also possible thanks to regular contact with state administration offices, real estate owners, road administrators, the Management of State Forests, administrators of land belonging to Polish State Railways, representatives of the State Water Holding 'Polish Waters', local communities and other beneficiaries, whose consent for the use of the real estate is obtained by the Company at the stage of creating 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.

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.

Additionally, due to the EU air quality requirements (IED, MCP directives), stricter emission standards, which should be met within a specific time limit, have been imposed on large- and medium-sized fuel combustion sources, As the replacement of solid fossil fuels with gas is one of the most advantageous solutions (also in economic terms), we have recently observed an increased interest from the energy and heating sector in connecting to the PSG distribution network.

The value of the Investment Plan of Polska Spółka Gazownictwa sp. z o.o. for 2023 is 2.607 billion PLN. In the current year, this figure was increased by an additional 492 million PLN for network expansion and connections. These funds are intended to accelerate the implementation of connections planned for subsequent years and their ongoing implementation within the scope of feasibility. This gives a total of 3.102 billion PLN.

The chart below shows the value and proportion of investment outlays in individual investment groups.

In 2023, 2.854 billion PLN has been planned for investment tasks directly related to the gas network, which represents 92% of the total value of the Investment Plan.

Level of investment
outlays in 2023

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.

As part of the 2023 PSG’s Strategic Investment Program the following are being implemented or are in the final settlement phase:

  • Funding agreements have been signed for ten identified projects with a total value of EU support exceeding PLN 255 million; whereas the total estimated value of investment outlays exceeds PLN 843, of which the planned capex for this year exceeds PLN 287 million.

    Including 2 completed projects:

    - Gasification of the city of Bielsk Podlaski, completed in 2021, with the OP I&E 2014-2020 funding received in excess of PLN 5.75 million,
    - Construction of the Lewin Brzeski - Paczków gas pipeline on the Hanuszów - Otmuchów section, completed in 05.2023, with received OP I&E 2014-2020 funding in excess of PLN 7 million.

    Including 2 projects with completed construction phase (at final clearance stage): 

    - Gasification of the Szczawnica region and neighboring municipalities,
    - Construction of a gas network in the Białystok Agglomeration.

    Including 6 projects in the execution phase: 

    - Construction of the Sandomierz–Ostrowiec Świętokrzyski gas pipeline,
    - 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.
  • Twelve unidentified projects i.e., showing readiness to apply for EU funds, 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 12 projects is approximately 620 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 over 1.03 billion PLN);
  • Seven 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 seven projects is aprox. 266 million PLN).

Some of the above strategic investments were included in the amendment to the special act on the terminal of 27 May 2021, which directly contributes to accelerating their design and deployment phases.

Planned outlays in 2023 – strategic investment

As part of the Investment Plan, the following nine investment tasks are implemented under the program, whose key objective is to reduce the negative impact of limitations at output points from the transmission system:

  • 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.
In total, around 590 km of high-pressure gas network is planned to be constructed. Among the 9 gas pipelines included in the Investment Law on the liquefied natural gas regasification terminal in Świnoujście (amended on 9 August 2019). The total value of estimated investment outlays for the implementation of the tasks listed above exceeds PLN 2 billion. In 2023, expenditure in the total amount of over PLN 38 million was incurred.

In terms of material progress, one task, the construction of a connection gas pipeline with a length of ca. 0.4 km for the transmission system of OGP Gaz-System S.A. in Zambrów, has been completed. 

As for the remaining projects, all or part of the required construction permits were obtained for several of them, while others are in the final design phase.

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