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 billion PLN. Approximately 56% 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 2018–2022 in individual investment groups:

Level of investment outlays, 2018–2022

In 2021, 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 2021 the construction and modernization of gas pipelines with a total length of 4,924 km was completed, and over 119,000 gas connections were built and modernized, with a total length of 1,291 km.

Length of gas networks built in 2021

A total of 6,216 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. It should be highlighted that in order to simplify and accelerate the process of preparing some of the PSG investments, the legislator decided to include 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, it is safe to conclude that in extreme cases it allowed us to complete the process of preparing the PSG investment within a year, which took 12 years and 3 months without the special act.

Notwithstanding the simplifications introduced, 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, representatives of the State Water Company Wody Polskie, 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.

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 2022 is 3.143 billion PLN. The chart below shows the value and proportion of investment outlays in individual investment groups.

In 2022, 2.854 billion PLN has been planned for investment tasks directly related to the gas network, which represents 91% of the total value of the Investment Plan.

Level of investment
outlays in 2022

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 2022 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. 687 million PLN, with co-financing at a level in excess of 249 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;

  • Twelve unidentified projects selected to receive 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 12 projects is approximately 287 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. 751 million 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 almost 222 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 2022 – strategic investment

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.

Moreover, 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.
The total value of estimated investment outlays related to the implementation of the tasks listed above is nearly PLN 1.28 billion. In 2021, expenditure was incurred in the total amount of PLN 16.16 million. The time needed to obtain a building permit for the gas pipelines in question is presented below.
9 PPI investments Time (actual or estimated) needed to get a building permit
1a Construction of the Kalisz - Sieradz - Meszcz high-pressure gas pipeline ZAD 1 2 years and 11 months
1b Construction of the Kalisz - Sieradz - Meszcz high-pressure gas pipeline ZAD 2 3 years and 9 months
2 Construction of the Łyszkowice - Słupia - Łódź high-pressure gas pipeline 2 years and 11 months
3 Construction of the Konopki - Ełk - Mrągowo high-pressure DN400 gas pipeline 3 years and 11 months
4 Construction of the Kolnik - Elbląg high-pressure gas pipeline 3 years and 9 months
5 Construction of the Dworzysko - Chojnice high-pressure gas pipeline 3 years
6 Construction of the Bytów - Chojnice high-pressure gas pipeline 2 years and 11 months
7 Construction of the Tulce - Nekla high-pressure gas pipeline 3 years
8 Construction of the Witkowo - Września high-pressure gas pipeline 3 years and 2 months
9 Construction of a gas pipeline constituting a connection to the transmission system of OGP Gaz-System located in Zambrów 2 years and 4 months
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