02.07.2012

Agreement on Feasibility study of the gas interconnection Poland-Lithuania (GIPL) is signed

GAZ–SYSTEM S.A. jointly with AB Lietuvos Dujos signed an agreement with a winner of the tender ILF Consulting Engineers Polska Sp. z o.o Company for the performance of a Feasibility Study of the interconnection between Poland and Lithuania (GIPL).

The feasibility study should be available by the first quarter of 2013 and will be the basis for the further actions regarding implementation of this project.

Analytical works (business case analysis and the feasibility study) on the gas interconnection Poland-Lithuania are being co-financed by the European Commission within the TransEuropean Energy Network Programme (TEN-E).

Last year, both companies performed business case analysis of the project and according to initial estimations the gas pipeline connecting Poland and LIthuania would be 562 km long, with a capacity enabling transporting of up to 2.3 bcm of natural gas annually to the Baltic States, with possibility of further expansion of  the capacity up to 4.5 bcm  per year.

"The Management Boards of GAZ-SYSTEM S.A. and Lietuvos Dujos have decided to continue works on this strategic interconnection. We are convinced that this project is of a great importance for the energy security and market integration of the Baltic States. In comparison with other diversification projects in the region, the interconnection between Poland in Lithuania provides a broader range of benefits, enabling access both to EU gas and global LNG markets and through bi-directional flow capabilities a higher security of supply for the connected countries." Joachim Hockertz, Deputy General Manager – Director of Commerce of AB Lietuvos Dujos said.

"The advantages of the construction of the GIPL are above all greater security and diversification of gas supplies in the Baltic State region. We are also considering this investment in the context of including Lithuania in the North-South Gas Corridor. These values may be very precious for the market and consumers of the Baltic States. GAZ-SYSTEM S.A. expects that a significant part of the investment will be financed from EU funds because this is a priority project in the scope of eliminating energy islandsin Europe,” Jan Chadam, President of the Management Board of GAZ-SYSTEM S.A, said.

The gas interconnection Poland-Lithuania is an element of the so-called Baltic Energy Market Interconnection Plan (BEMIP). BEMIP constitutes one of the priorities for the development of the energy infrastructure marked out by the European Union within the Second Strategic Energy Review (SER2). Its purpose is to integrate the gas and energy markets in the Baltic Sea region as well as put an end to the isolation of Baltic countries from the European Energy market.

More information about the project as well as an initial description of the GIPL can be found in the brochure.

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AB Lietuvos Dujos is mostly involved in the following fields of activity: import of natural gas and its sale to individual customers, transmission and distribution services, sustainable and economically justified development of the natural gas supply infrastructure. The company controls assets worth over 2.5 billion Litas. AB Lietuvos Dujos is the operator of 1.9 thousand kilometres of transmission gas pipelines, 8.1 thousand kilometres of distribution gas pipelines, 65 measurement and regulation stations, 3 gas measurement stations and 2 gas compressor stations. The Company supplies natural gas for heating and production of electricity, supplying companies and institutions as well as inhabitants of the country. Approx. 40% of the gas consumed in Lithuania comes from supplies performed by AB Lietuvos Dujos. The Company transits via the territory of Lithuania all gas quantities consumed in the Kalinigrad Oblast of the Russian Federation. The average employment in the Company amounts to 1,700 persons and the number of customers exceeds 550,000. In the last decade, AB Lietuvos Dujos invested over a billion Litas in the Lithuania gas infrastructure.

AB Lietuvos Dujos conducts activity according to the corporate responsibility principles, placing emphasis on environmental protection, respect of customer and company employee rights, promotion of economic development and an active participation in the milieu. The Company participates in many charity campaigns frequently initiated by its employees and supports social and cultural initiatives. AB Lietuvos Dujos is one of the largest taxpayers in Lithuania.

The Gas Transmission Operator GAZ-SYSTEM S.A. is a strategic Polish Company responsible for natural gas transmissions throughout Poland. The Company manages assets worth approx. 5 bn PLN comprised mainly of elements of the transmission system, e.g. more than 9.7 thousand km of high pressure pipelines, 14 compressor stations, 56 hubs and 970 exit points. The Company employs over 2,000 persons. GAZ-SYSTEM S.A. is also the owner of the Polskie LNG S.A. Company, which was established to construct the liquefied natural gas terminal (LNG) terminal in Świnoujście.

GAZ-SYSTEM S.A. is constructing over 1,000 km of new gas pipelines by 2014. The most important will be in north-west and central Poland (Szczecin–Lwówek, Świnoujście–Szczecin, Szczecin–Gdańsk, Rembelszczyzna–Gustorzyn, and Gustorzyn-Odolanów). The development of the gas transmission network in Poland may constitute an important element of the North - South Gas Corridor connecting the LNG terminal in Świnoujście with the planned Adria LNG terminal through the transmission infrastructure of Central European countries. In 2011, GAZ-SYSTEM S.A. completed the construction of the Włocławek-Gdynia gas pipeline and the gas compressor station in Goleniów and Jarosław. The Company has also opened the new Poland–Czech Interconnector, which will enable the transmission of approx. 0.5 bcm of gas annually. GAZ-SYSTEM S.A. has also developed gas pipelines in Lower Silesia, which will enable the off-take of greater amounts of gas from the western direction. It is possible to transport up to 1.5 bcm of gas annually (the earlier capacity amounted to 0.9 bcm of gas annually) via the Lasów point on the Polish-German border.

Investments fulfilled by GAZ-SYSTEM S.A. in 2011 with the possibility of using virtual reverse flow services on the Yamal pipeline have created the technical possibilities to import over 3.3 bcm of gas annually to Poland from new sources (approx. 30% of the currently performed import).

Contact:
Jolita Butkiene, PR Officer for AB Lietuvos Dujos
tel. +370 5 236 01 35; (+370) 685 43610
e-mail: j.butkiene@lietuvosdujos.lt

Małgorzata Polkowska, Press Spokesperson for
GAZ-SYSTEM S.A.
Tel. (0048 22) 220 17 55, mob. (+48) 691 911 217
e-mail: pr@gaz-system.pl


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