Gaz-System S.A.Transmission System

Operator

Gdynia, 26.06.2009

AGENDA

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GAZ-SYSTEM S.A. Transmission system - Facts & Figures

Disruption of supply 2009

System development

Activities

GAZ-SYSTEM S.A. Facts&Figures

National gas transmission system operator (TSO)

Established on the basis of the Directive of the European Parliament and the European Council 2003/55/EC

Formed in April 2004, unbundled from PGNiG S.A.

Joint-Stock Company, owned by the State Treasury as the only shareholder

•Company-owned transmission assets worth over 3 billion PLN

•Near 2 000 employees across Poland.

•6 Regional Branches: •Gdańsk, •Poznań,•Rembelszczyzna, •Świerklany, •Tarnów, •Wrocław.

GAZ-SYSTEM S.A. Facts&Figures

Transmission system elements

(2009):9 800 km pipelines14 compressor stations57 gas nodes970 exit points

Main Characteristics:Polish gas system is connected with the European Gas Network system but only along the East-West direction. Gas imports mainly from Eastern direction.Gas Imports amounting to 70% of total national consumption .The remaining 30% is covered by national production.Transmnission of 14.7 bcm/year

Transmission System Overview

TRANSMISSION SYSTEM Network

U ND E RC O N S T R UCTI ON

Underground Gas Storages Cooperation with Transmission System

Operational capacity UGS

mln m3

Technical transport capacity

to supply the system

(UGS withdrawal)mln m3/day

Technical transport capacity to

injection UGS

mln m3/day

HUSÓW 400 5,7 2,4

SWARZÓW 90 1,0 0,7

BRZEŹNICA 65 0,9 0,8

STRACHOCINA 150 1,2 1,4

WIERZCHOWICE 575 4,8 3,6

MOGILNO 380 18,0 9,6

TOTAL 1660 31,6 18,5

DEMAND AND SUPPLY2008

0,0

10,0

20,0

30,0

40,0

50,0

60,0

70,0

mln m3/day

UGS INJECTION UGS WITHDRAWL

SUPPLAY WITHOUT UGS

CUSTOMERDEMAND

Supply 2008

0,0

5,0

10,0

15,0

20,0

25,0

30,0

35,0

40,0

45,0

50,0

55,0

60,0

65,0

mln m3/day

NATIONAL PRODUCTION - GAS MINES NATIONAL PRODUCTION - ODOLANÓW IMPORT

SUPPYL WITH UGS SUPPLY WTITHOUT UGS

Demand 2008

0,0

10,0

20,0

30,0

40,0

50,0

60,0

mln m3/day

CUSTOMERS DEMAND WITHOUT UGS EXIT TO NITROGEN - MATHANE SYSTEM

INDUSTRIAL CUSTOMERS (NOPROTECTED CUSTOMERS) THE OTHER CUSTOMERS

Supply and pressure - Drozdowicze01-02 2009

0,0

0,5

1,0

1,5

2,0

2,5

3,0

3,5

4,0

4,5

0,0

100,0

200,0

300,0

400,0

500,0

600,0

700,0

MPa1000 m3/h

day/hourDrozdowicze - Supply Drozdowicze - pressure

Supply and flowsPeak day 2009

Supply and flowsPeak day 2006

AVAILABLE CAPACITIES AND CONGESTIONS

Hermanowice-Strachocina

Szczecin-Gdańsk

Świnoujście- Szczecin

Włocławek-Gdynia

Szczecin-Lwówek

Gustorzyn-Odolanów

Rembelszczyzna-Gustorzyn

Jeleniów-Dziwiszów

Zdzieszowice-Ołtaszyn

Skoczów-Komorowice-Oświęcim

Strachocina- Wygoda

Baltic Pipe

LNG Terminal

Network expansion

Development of Interconnections

Poland- Czech Rep. Connection

New connection integrating the gas systems of both countries which will diversify and ensure stable gas supplies to end customersIncrease of safety of systems operations Project developed in cooperation with Czech TSOCommencement of operations: 2010/2011

Enhancing Poland-Germany Connection

Development of existing interconnection between the gas systems of both countriesIncrease of safety of systems operations Possibility of increased flows from western direction in case of crisisCapacity increase: 0,5 bcm p.a.Commencement of operations: 2011

LNG Terminal will be located in the Port of ŚwinoujścieProject developed by SPV Polskie LNG (PLNG) owned by GAZ-SYSTEM S.A. One jetty for LNG tankersLNG Terminal’s regas capacity:

Phase I/II: 2.5-5.0 bcm / 1,85-3,7 Mt LNG/yearPhase III: 7.5 bcm / 5,6 Mt LNG/year

LNG storage capacity:2 tanks 160 000 m3 LNG each

LNG loading infrastructure for trucks.Open season procedure - start 23 of June 2009 – end expected January 2010

documents available at www.polskielng.pl

LNG TerminalŚwinoujście

Interconections - Conclusions

LNG

Baltic Pipe

PL-CZ

PL-DE

2009 2010 2011 2012 2013 2014 2015 2016

OPEN SEASON

• Applied in the case of constructing new elements of the gas system in order to adjust the parameters of the planned investment to market expectations.

• Procedure implemented pursuant to ERGEG guidelines.

•The procedure is conducted in strict cooperation with the Polish Energy Regulatory Office in order to ensure the Investor applies non-discriminative access policies to the network.

NEW PROJECTS – OPEN SEASON

Tietierowka

Wysokoje

Drozdowicze

Lasów

Szczecin

Płoty

Lwówek

Włocławek

GAZ-SYSTEM on Transparency Platform

• GAZ-SYSTEM is active on the Transparency Platform from its launch on 17th November 2008.

• The TSO-related information and Capacity & tariff information have been published

• On 17 march GAZ-SYSTEM switched display of its capacity data from Nm3/d to kWh/d.

• On 2 April GAZ-SYSTEM added to Transparency Platform data on its capacity allocation mechanism and on its balancing model, balancing tolerances applied and other static balancing information.

• GAZ-SYSTEM constantly uploads data files to the Transparency Platform.

• Actually GAZ-SYSTEM is working on its automatic upload of nominations, re-nominations and allocations for its respective interconnection points.

Interconnection Points Agreements• GAZ-SYSTEM has signed IPA with all TSOs

connected to our system:– Biełtransgaz (Belarus)– ONTRAS (Germany)– UKRTRANSGAZ (Ukraine)

• Due to geographic position we are like transition area between two arts of gas market

– Eastern: • quantity - volume by 20 C,• energy day 8/8, • allocation based on seller decisions• No balancing market

– Western• Quantity – energy • Energy day 6/6• OBA• Market based balancing

– Middle (PL)• Quantity – volume by 0 C• Energy day 10pm/10pm• Regulated market

• But all discrepancies are covered in practice

Thank you for your attention

piotr.bujalski@gaz-system.pl

stanislaw.brzeczkowski@gaz-system.pl