“The arbitral award in favour of PGNiG against Gazprom was undoubtedly the most important event of 2020 for us from the financial point of view. Our results were considerably improved by the one-off refund by the Russian gas supplier of the overpayments made by PGNiG from 2014 to 2020. However, far more important was the establishment of a new pricing formula under the Yamal contract, as it will affect the cost of gas procurement in the coming quarters,” commented Paweł Majewski, President of the PGNiG Management Board. “We have already been seeing its permanent positive effect, particularly with respect to operating expenses, since the second half of 2020. Despite the unfavourable conditions caused by fluctuations in feedstock prices and restrictions related to the pandemic, we achieved record-high results, which we are satisfied with,” added Paweł Majewski.

The positive effect of the new pricing formula for gas bought from Russia is clearly reflected in PGNiG’s results net of the refund and impairment losses on non-current assets. EBITDA for 2020 grew 46% year on year, to PLN 8.6bn, and EBIT rose 82% year on year, to PLN 5.2bn. The significant improvement in the business conditions following the pricing formula change especially affected the performance of the Trade and Storage segment. Net of the refund, its EBITDA for 2020 increased ten-fold and EBIT grew seven-fold. In 2020, PGNiG sold approximately 3% more gas than in 2019, generating a total sales volume of 31.64 bcm.

“We will use our strong financial and operating performance to develop a platform necessary for further growth. We intensified our gas network rollout efforts in Poland – in 2020 we added close to 113,000 new gas network connections, while in 2019 the number was less than 82,000. The PGNiG Group has 63 regasification stations now and plans to launch new ones this year. The infrastructure will enable us to reach new customers and increase sales,” said Paweł Majewski. “The most recent rating by Fitch, whereby PGNiG's BBB with stable outlook was upheld, reflects our position of a gas market operator with a diversified portfolio of gas import contracts. LNG imports alone grew almost 10% year on year,” he added.

Oil production across the entire PGNiG Group rose by 8% year on year and reached 1.32 million tonnes, while natural gas production remained stable at approximately 4.52 bcm. The volume of distributed gas was approximately 11.57 bcm and remained largely unchanged on 2019. Revenue from distribution services increased by 4% year on year, to PLN 4.39bn. The Generation segment’s revenue from sales of heat grew 10% year on year, to approximately PLN 1.47bn. Its total revenue was up 8% year on year, amounting to approximately PLN 2.77bn. 

“Demand for gas is expected to grow in the coming years, driven, among other things, by the launch of new gas-fired units at CHP plants. The linking of prices of gas bought from countries east of Poland with European exchange indices has created a completely new business environment and is of paramount importance to PGNiG. It will help us to effectively address challenges posed by the ongoing energy transition. Natural gas will play a key role in the process, and PGNiG is ready to go through this transformation and support the Polish economy in it,” said President of the PGNiG Management Board.