PGNiG Intensifies Production of Natural Gas on the Norwegian Continental Shelf

Source: 5/11/2022, Location: Europe

PGNiG Upstream Norway plans to produce additional volume of approximately 0.5 billion cubic meters of natural gas this year. This will allow the company's total production to reach 3 bcm of gas in 2022. Following the launch of the Baltic Pipe pipeline, the hydrocarbons produced by the PGNiG Group in Norway will be delivered to Poland.

“The Norwegian Continental Shelf is a priority area of development of the PGNiG Group's exploration and production operations and plays a very important role in our strategy for diversification of gas supplies to the Polish market. In connection with recent events, including cut off of gas supplies under the Yamal contract, the results of our operations in Norway have gained particular significance. Soon, after the launch of the Baltic Pipe, additional cubic meters of gas extracted by PGNiG in Norway will translate to more energy security for Poland", said Iwona Waksmundzka-Olejniczak, President of the Management Board of PGNiG SA. “I would like to thank the license partners of PGNiG Upstream Norway and the Norwegian petroleum administration, without which cooperation production of additional half a billion cubic meters of natural gas by our Group this year would not have been possible”, she added.

The increased gas production comes from three reservoirs: Skarv, Gina Krog and Duva. In the case of the first two fields, the increase in production will be possible thanks to discontinuation of gas injection into the reservoirs. Gas injections are commonly performed by companies operating on the Norwegian Continental Shelf to accelerate oil production – the injected gas is extracted again at a later stage of the field's exploitation. A decision to cease gas injection means modification of each field’s Plan for Development and Operation, and therefore requires consent from the Norwegian Petroleum Directorate.

PGNiG Upstream Norway and its license partners have obtained such approvals and as a result the Company will produce additional over 300 mcm from Gina Krog and almost 150 mcm of natural gas from the Skarv field by the end of the year.

In the case of Duva, the increase in production is possible thanks to the use of free capacities at the production installation serving the Gjøa field, to which Duva is tied-in. The spare capacity will be available until the end of August, when the Nova field, also Gjøa tie-in, will come on line. Until then, PGNiG Upstream Norway plans to produce an additional 30 mcm of gas from Duva.

PGNiG Upstream Norway estimates that it can produce a total of approximately 0.5 bcm of additional gas from Gina Krog, Skarv and Duva this year, which means that the company may produce about 3 bcm in 2022, more than 15% over the forecast. Once the Baltic Pipe pipeline is launched in Q4 2022, PGNiG will be able to supply additional volumes from Gina Krog and Skarv to Poland.

PGNiG Upstream Norway assumes achieving additional production volumes also in the following years. In 2023, the Company plans to produce 2.5 bcm of gas, i.e. 100 million cubic meters more than previously forecast. In 2024, the PGNiG Group's output on the Norwegian Continental Shelf may reach 2.9 bcm – this is 0.3 bcm more than assumed so far. The production growth will be possible primarily thanks to the discontinuation of gas injection and extraction of gas which has already been injected.

PGNiG Upstrem Norway holds an 11.3% interest in the Gina Krog license, an 11.92% interest in Skarv license and a 30% interest in Duva license. The company's license partners are Equinor and KUFPEC (Gina Krog), AkerBP, Equinor and WintershallDEA Norge (Skarv) and Neptune Energy, INPEX Idemitsu Petroleum Norge and Sval Energi (Duva).

PGNiG Upstream Norway holds interests in 59 licenses on the Norwegian Continental Shelf and produces from fourteen fields. Last year, the company's natural gas production volume was 1.42 bcm, up from 0.48 bcm in 2020. The dynamic growth was possible thanks to, among other things, the acquisition of all assets of INEOS E&P Norge, including 21 licenses, and other acquisitions from 2017 to 2020 as well as the completion of the development of the Ærfugl field and the start of production from the Gråsel and Duva fields.

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