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NATIONAL TEN-YEAR TRANSMISSION SYSTEM DEVELOPMENT PLAN DEVELOPMENT PLAN FOR SATISFYING THE CURRENT AND FUTURE TRANSMISSION DEMAND FOR NATURAL GAS FOR 2016-2025 EXCERPT Warsaw, 6 April 2016

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Page 1: Krajowy Dziesięcioletni Plan ... - GAZ-SYSTEM S.A.: Home€¦ · 20 October 2010 concerning measures to safeguard security of gas supply and repealing Council Directive 2004/67/EC

NATIONAL

TEN-YEAR TRANSMISSION SYSTEM DEVELOPMENT PLAN

DEVELOPMENT PLAN FOR SATISFYING THE CURRENT

AND FUTURE TRANSMISSION DEMAND FOR NATURAL GAS FOR 2016-2025

EXCERPT

Warsaw, 6 April 2016

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TABLE OF CONTENTS 1. GAZ-SYSTEM S.A. – TRANSMISSION SYSTEM OPERATOR .................................................................................. 5

2. NATIONAL DEVELOPMENT PLAN ....................................................................................................................... 8

2.1. Development Plan bases ....................................................................................................................... 8

2.2. Document structure .............................................................................................................................. 8

2.3. Consultations of the Development Plan ................................................................................................ 8

3. CONSIDERATIONS OF NATIONAL TRANSMISSION SYSTEM DEVELOPMENT ................................................... 14

3.1. Considerations arising from the Energy Policy .................................................................................... 14

3.2. Considerations arising from the Community-wide ten-year development plan ................................ 14

3.3. Considerations arising from the SoS Regulation ................................................................................. 15

3.4. Considerations arising from the Energy Security Strategy of the European Union ............................ 16

3.5. Determinants of NTS development ..................................................................................................... 16

3.6. DEMAND FOR THE TRANSMISSION SERVICE ....................................................................................... 17

4. DEVELOPMENT PLAN FOR 2016-2025 ............................................................................................................. 22

PART A ............................................................................................................................................................. 22

4.1. Introduction ......................................................................................................................................... 22

4.2. DEVELOPMENT PLAN implementation results .................................................................................... 24

4.3. List of selected investment projects included in the DEVELOPMENT PLAN........................................ 26

PART B ............................................................................................................................................................. 32

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LIST OF ABBREVIATIONS AND TERMS

BEMIP GRIP

Baltic Energy Market Interconnection Plan Gas Regional Investment Plan prepared by the region’s TSOs - AS EG Võrguteenus (Estonia), Energinet.dk (Denmark), Gasum Oy (Finland), AS Latvijas Gaze (Latvia), AB Amber Grid, (Lithuania), GAZ-SYSTEM S.A. (Poland) and Swedegas AB (Sweden), under Regulation No 715/2009 of the European Parliament and the Council of 13 July 2019, published on the ENTSOG website and the websites of the TSOs involved in Plan preparation.

CAM NC

Network Code for Capacity Allocation Mechanism Commission Regulation (EU) No 984/2013 of 14 October 2013 establishing a Network Code on Capacity Allocation Mechanisms in Gas Transmission Systems and supplementing Regulation (EC) No 715/2009 of the European Parliament and of the Council, published in the Official Journal of the EU - L 273 of 15.10.2013

CEF Connecting Europe Facility – an EU funding instrument established under Regulation No 1316/2013 of the European Parliament and of the Council of 11 December 2013, published in the Official Journal of the EU - L 348 of 20.12.2013

ENTSOG European Network of Transmission System Operators for Gas

EuRoPol GAZ s.a. System Gazociągów Tranzytowych EuRoPol GAZ Spółka Akcyjna (Transit Gas Pipeline System Operator)

E-gas high-methane natural gas

Lw-gas low-methane natural gas

Natural gas E-gas and Lw-gas (converted into E-gas)

GAZ-SYSTEM S.A. Operator Gazociągów Przesyłowych GAZ-SYSTEM S.A. Spółka Akcyjna (Gas Transmission Operator)

GIPL Gas Interconnection Poland – Lithuania

GSA Capacity trading platform – GAZ-SYSTEM Auctions

GUS Central Statistical Office of Poland

TNC Transmission Network Code

SGT TNC Transmission Network Code for the Polish section of the Yamal-Europe Transit Gas Pipeline System

KAPE Polish National Energy Conservation Agency

Commission European Commission

CUGS Cavern Underground Gas Storage

NTS National Transmission System – the transmission network together with facilities connected to it and installations integrated with it, owned by GAZ-SYSTEM S.A.

LRE Gas Load Related Expenditure

MFPWEOSM Interconnection physical entry points to the transmission system at interconnections with storage facilities, referred to as interconnection physical entry points

MOP Maximum Operating Pressure

NLRE Gas Non-Load Related Expenditure (upgrades/replacements)

OD Optimal Development

TSO Transmission System Operator

OTC Over-the-counter (market)

RES Renewable Energy Sources

PCI Project of Common Interest as defined in Regulation (EU) No 347/2013 of the

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European Parliament and of the Council of 17 April 2013 on guidelines for trans-European energy infrastructure and repealing Decision No 1364/2006/EC and amending Regulations (EC) No 713/2009, (EC) No 714/2009 and (EC) No 715/2009, published in the Official Journal of the EU - L 115 of 25.4.2013

PEP 2030 Poland’s Energy Policy until 2030

PEP 2050 Poland’s Energy Policy until 2050

GDP Gross Domestic Product

UGS Underground Gas Storage

PSG Sp. z o.o. Polska Spółka Gazownictwa Spółka z ograniczoną odpowiedzialnością

EP Entry Points for which capacity allocation (CA) is made

PoI Point of Interconnection

RNI Other investment projects (communication, metering, project preparation, etc.)

SoS Regulation

Regulation (EU) No 994/2010 of the European Parliament and of the Council of 20 October 2010 concerning measures to safeguard security of gas supply and repealing Council Directive 2004/67/EC published in the Official Journal of the EU - L 295 of 12.11.2010

SGT

Transit Gas Pipeline System - the Yamal-Western Europe gas pipeline section situated within the territory of the Republic of Poland, which is owned by the company System Gazociągów Tranzytowych EuRoPol GAZ Spółka Akcyjna, for which GAZ-SYSTEM S.A. is an ISO

SRPPW Auxiliary Pressure Reduction and Metering Stations

SSRP System Regulation and Metering Station

Transmission System A system consisting of the National Transmission System and the Transit Gas Pipeline System

TYNDP

Ten-Year Network Development Plan – a Community-wide plan prepared by ENTSOG pursuant to Regulation (EU) No 715/2009 of the European Parliament of and the Council of 13 July 2009, published in the Official Journal of the EU - L 273 of 15.10.2013

EU European Union

Energy Law The Act of 10 April 1997 - Energy Law (Journal of Laws of 2012, item 1059, as amended)

ERO Energy Regulatory Office

MG Moderate Growth

GMN Gas Metering Node

CU Connection unit

CCU Compressor connection unit

ZUP Shipper

BVS Block valve station

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1. GAZ-SYSTEM S.A. – TRANSMISSION SYSTEM OPERATOR

Basic information on GAZ-SYSTEM S.A.

→ GAZ-SYSTEM S.A. is a company responsible for the transport of natural gas

and transmission network management within the territory of Poland;

→ A company of strategic importance to Polish economy and the country’s energy security;

→ Operates under a licence issued by the President of the Energy Regulatory Office which is valid until the end of 2030;

→ Operates as transmission system operator and independent operator of the Polish section of the Yamal-Europe Transit Gas Pipeline System

→ A Joint-Stock Company. Corporate governance of the company is exercised by the Government Plenipotentiary for Strategic Energy Infrastructure

→ GAZ-SYSTEM S.A. has a subsidiary, Polskie LNG S.A., set up to construct the LNG reception terminal at Świnoujście;

→ A company that implements strategic projects of European significance, in particular for the integration of the Central and Eastern European market.

Gas Transmission Operator GAZ-SYSTEM S.A., appointed by decision of the President of the ERO of 13 October 2010, as gas transmission system operator, manages the national transmission network

and maintains continuous and reliable transmission of gas between sources and customers in Poland.

According to the provisions of the Energy Law, one power transmission system operator is appointed

within the territory of the Republic of Poland. In view of the above, on 17 November 2010, the President of ERO appointed GAZ-SYSTEM S.A., for the period until 31 December 2025, as operator of the

transmission system in the Transit Gas Pipeline System (SGT) situated within the territory of the Republic of Poland.

In 2014, the President of the Energy Regulatory Office granted GAZ-SYSTEM S.A. a certificate of independence in connection with the transmission system operator function performed on its own

networks.

On 19 May 2015, GAZ-SYSTEM S.A. obtained a certificate of independence in connection

with its function of transmission system operator on the Polish section of the Yamal-Western Europe gas pipeline which is owned by EuRoPol GAZ s.a., and the operator function on

the Transit Gas Pipeline System (SGT) is performed by GAZ-SYSTEM S.A in compliance with the guidelines of Directive 2009/73/EC based on the ISO, i.e. independent system operator, model.

The award of certificates of independence means that GAZ-SYSTEM S.A. is independent, in terms of legal form, organisation and decision-making, of the performance of other activities not related to the

transmission of gaseous fuels. According to the regulations in force, the transmission system operator function in Poland can be performed only by an entity that has been granted a certificate of

independence by decision of the President of ERO.

According to Article 9c (1) of the Energy Law, the gas transmission system operator, applying objective

and transparent rules that ensure equal treatment of the system’s users and taking into account environmental protection requirements, is responsible for:

→ security of gaseous fuel supply by ensuring the operational security of the gas system and the performance of contracts with the users of the system;

→ management of network operation in a coordinated and effective manner whilst ensuring the required reliability of gaseous fuel supplies and fuel quality;

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→ operation, maintenance and repairs of the network, installations and facilities, including

connections with other gas systems in a manner that guarantees the reliable operation of the gas system;

→ ensuring the long-term capacity of the gas system to satisfy justified needs regarding the transmission of natural gas in national and cross-border trade, as well as the expansion of the gas

system and, where applicable, the expansion of interconnections with other gas systems;

→ cooperation with other gas system operators or energy enterprises to ensure the reliable and

efficient operation of gas systems, interconnected gas systems, and coordinating their development;

→ use of the capacity of storage facilities and liquefied natural gas facilities;

→ management of the gas fuel flows and maintaining the quality parameters of those fuels in the gas

system and at connections with other gas systems;

→ the provision of services necessary for the correct operation of the gas system;

→ balancing the system and management of constraints in the gas system, and the settlement of accounts with the users of the system arising from the non-balancing of gas

fuels supplied to and withdrawn from the system;

→ the delivery to system users and operators of other gas systems of information on the conditions for

the provision of transmission or distribution services, gas storage services or natural gas liquefaction services, including information on interoperability with interconnected gas systems;

→ handling constraints in the supply of gaseous fuels;

→ performing the obligations arising from Regulation (EC) No 715/2009 of 13 July 2009 on conditions

for access to the natural gas transmission networks.

A particularly important part of responsibility of GAZ-SYSTEM S.A. is the obligation to develop a

transmission system that ensures long-term capability of the gas system to satisfy justified needs for domestic and cross-border gaseous fuel transmission through its expansion

and, where applicable, to expand interconnections with other gas systems. The formal obligation to prepare the Development Plan arises from the provisions of Article 16 of the Energy Law of 10 April 1997

(Journal of Laws of 1997, No 54, item 348, as amended), according to which energy enterprises dealing with the transmission of gaseous fuels prepare development plans for meeting the current and future

demand for gaseous fuels. According to Article 16 (16) of the Energy Law, draft plans are subject to approval by the President of the Energy Regulatory Office.

Therefore, GAZ-SYSTEM S.A. has prepared the National Ten-Year Development Plan for 2016-2025 covering the entire transmission infrastructure situated within the territory of Poland, i.e. the

National Transmission System and the Transit Gas Pipeline System. The plan was approved by the President of ERO on 6 April 2016, except the following investment projects:

1. Project titled “UGS - Documentation”,

2. Two investment projects related to the Damasławek CUGS gas storage facility titled:

a) "DN 1200 Damasławek - Mogilno Gas Pipeline, L=50 km",

b) “DN 1000 Mogilno - Odolanów Gas Pipeline, L= 150 km”,

3. Project titled “DN 700 Niechorze - Płoty Gas Pipeline, L=44 km",

4. Project titled "GAZ-SYSTEM S.A. Headquarters",

5. Two investment projects classified as equity investments, i.e. projects titled:

a) “Baltic Pipe submarine gas pipeline”,

b) “UGS - co-financing of a special purpose vehicle".

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The President of ERO decided that expenditure in the amount of PLN 5,048.7 million was a justified level

of capital expenditure for the transmission network in 2016-2020.

At the same time, the President of ERO noted that the above-mentioned capex level did not include

expenditure for:

A) Three projects related to the Poland – Lithuania interconnection,

B) Five projects related to the Poland-Slovakia interconnection,

C) Three projects related to the expansion of the LNG Terminal to 7.5 billion m3,

D) Four projects related to the construction of the eastern section of the North-South corridor,

E) The project titled “Construction of Hermanowice MS together with a DN 1000 L=1.5 km section - exit

point to Ukraine".

The President of ERO also stressed that this did not limit the actual investing activities, but funds for

further dynamic investing must be acquired in a manner other than through direct increasing of rates for the transmission services provided.

In his letter, the President of ERO justified his position, stating he was suspending the approval of the capital investment level for certain projects until:

- the elimination by GAZ-SYSTEM S.A. of risks identified and the final decision is taken on the construction (Poland-Lithuania),

- the completion of the marker research procedure and the final decision is taken on the interconnection (Poland-Slovakia),

- taking the binding decision (expansion of the LNG terminal),

- project implementation starts on the Ukrainian side (Poland-Ukraine).

At the same time, the President of ERO stated that the final amount of revenue from transmission activities would be determined in the course of approval, for the years covered by the plan, of a tariff set by GAZ-SYSTEM S.A.

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2. NATIONAL DEVELOPMENT PLAN

2.1. Development Plan bases

The obligation to prepare a development plan with regard to meeting the current and future demand for gaseous fuels arises from the provisions of Article 16 (1) of the Energy Law. According to Article 16 (2)

of the Energy Law, the National Development Plan is prepared by the gas transmission system operator for a period of 10 years. GAZ-SYSTEM S.A. is also the party responsible for planning the development of

the Transit Gas Pipeline System in accordance with Article 16 (3) of the Energy Law.

The development plan is prepared on the basis of:

→ Energy policy of the European Union (EU);

→ Poland’s Energy Policy until 2030;

→ A concept of physical development of the country;

→ Legal acts of the European Union (in particular, Regulation (EU) No 994/2010 and the Third Energy

Package);

→ Gas demand forecast for Poland until 2035 (GAZ-SYSTEM S.A. study of 2015);

→ Ten-Year Network Development Plan (TYNDP 2015) prepared by ENTSOG;

→ GAZ-SYSTEM S.A. Investment Plan;

→ System development analyses, concepts and projects consistent with the strategic objectives of the Company.

Having regard to formal and legal considerations, the NATIONAL TEN-YEAR TRANSMISSION SYSTEM DEVELOPMENT PLAN for 2016-2025 (hereinafter referred to as “National Development Plan 2016-2025”)

was divided into two parts concerning:

GAZ-SYSTEM S.A. infrastructure development “Part A”

SGT infrastructure development “Part B”

2.2. Document structure

The document prepared for Part A takes into account two development perspectives, i.e.:

→ 2020 perspective – covering the continuation of the projects started, defined in the Development

Plan for 2014-2023, related in particular to: the construction of the North-South Gas Corridor (western and southern sections) and integration of the gas market of the Baltic states with the CEE gas

market.

→ 2025 perspective – taking into account the directions of projects for which investment decisions will

be taken depending on the degree of development of the gas markets in Poland and in the region.

2.3. Consultations of the Development Plan

What provided a basis for the development of the draft National Development Plan for 2016-2025 was

an approved GAZ-SYSTEM S.A. Development Plan for 2014-2023, updated based on analyses carried out by GAZ-SYSTEM S.A. as well as information on the planned directions of

development obtained through ongoing, close cooperation with the largest distribution system operator in Poland (Polska Spółka Gazownictwa sp. z o.o.). In addition, data were analysed

and taken into account concerning the development of the volume and capacity of underground gas

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storage facilities sourced from official publications on the storage system operator and those obtained

in the course of cooperation under the connection procedure.

The draft National Development Plan 2016-2025 was made available to system users for consultation on

29 July – 19 August 2015 on the website www.gaz-system.pl. Information on the consultation process was communicated to the public through popular industry Internet portals such as CIRE (Centrum

Informacji o Rynku Energii – Energy Market Information Centre) and WNP (Wirtualny Nowy Przemysł – Virtual New Industry), and through direct email information and messages in the SWI (System Wymiany

Informacji - Information Exchange System) for the publication and exchange of information between GAZ-SYSTEM S.A and market participants.

All comments and observations collected in the consultation process were analysed,

and reasoned conclusions were taken into account in the National Development Plan 2016-2025.

Nine Entities took active part in consultations.

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EXISTING TRANSMISSION SYSTEM

The transmission system consists of two

interoperating systems:

→ Transit Gas Pipeline System; → National Transmission System.

which consists of two natural gas subsystems: � High-methane natural gas (E)

� Low-methane natural gas (Lw) The transmission system is supplied with gas from

the following Entry Points :

1) Entry points related to gas imports:

a) Eastern border:

� Kondratki – Polish-Belarussian border � Wysokoje – Polish-Belarussian border

� Drozdowicze – Polish-Ukrainian border.

b) Western border:

� Lasów – Polish-German border � Mallnow – Polish-German border

c) Southern border:

� Cieszyn – Polish-Czech border.

d) NTS interoperates with SGT via:

� The Point of Interconnection which consists of physical points at Włocławek

and Lwówek.

2) Interconnections for local imports

� Tietierovka – Polish-Belarussian border � Branice – Polish-Czech border;

� Gubin – Polish-German border; � Głuchołazy – Polish-Czech border (standby point).

3) Entry points related to domestic deposits:

� in the high-methane natural gas system

� in the low-methane natural gas system.

4) Odolanów Denitrogenation Plant, Grodzisk Denitrogenation Plant

5) Entry points related to seven Underground Gas Storages (UGS) which are system entry points for gas reception

Figure 1. National Transmission System

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Table 1. Parameters of Transmission System cross-border entry points.

Entry point Operator Technical capacity

bn m3/year thous m3/h GWh/h

Kondratki Gazprom Transgaz Belarus / GAZ-SYSTEM S.A. 30.7 92413 42.7

Drozdowicze PJSC Ukrtransgas/GAZ–SYSTEM S.A. 4.4 500 7.34

Vysokoye Gazprom Transgaz Belarus / GAZ – SYSTEM S.A

5.5 625 7.04

Mallnow GASCADE Gastransport GmbH / GAZ-SYSTEM S.A. 5.4 620 6.8

Lasów ONTRAS /GAZ–SYSTEM S.A 1.5 180 2.01

Tietierovka Gazprom Transgaz Belarus/ GAZ–SYSTEM S.A

0.2 27 0.30

Cieszyn NET4GAS/GAZ–SYSTEM S.A 0.5 111.7 1.23

The high-methane natural gas system constitutes a trunk system encompassing:

→ the Transit Gas Pipeline System;

→ a southern trunk line on the Jarosław – Wronów – Rembelszczyzna route; → a southern trunk line on the Jarosław – Pogórska Wola – Tworzeń – Odolanów route;

→ a new south-western trunk line: Lwówek – Szczecin – Świnoujście LNG Terminal – Szczecin – Gdańsk;

→ a central Poland supply system on the Hołowczyce – Rembelszczyzna route and further on strengthened on the Gustorzyn – Odolanów route

→ a northern Poland supply system on the Gustorzyn – Gdańsk route → a transmission system in Lower Silesia.

Figure 2. Main E-gas trunk lines

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The low-methane natural gas transmission system covers parts of western Poland in 3

voivodships: Lubuskie, Greater Poland and Lower Silesia.

It is supplied with gas from the fields located in the Polish Lowlands by the following gas

mines: Kościan-Brońsko, Bonikowo, Białcz, Radlin, Zaniemyśl (Mchy) and Roszków. In

addition, the system is supplied with gas from the Wielichowo mine, which needs the

addition of high-methane gas at the Grodzisk Wlp. gas mixing facility to reach

Lw-gas specifications.

Table 2. Technical characteristics of the Transmission System (as at 31 December 2014)

Underground gas storages interoperate with the high-methane gas transmission system, playing an important role in covering the seasonal and daily non-uniformity of gas demand.

Along with the development of interconnections, Poland and the region have been gaining an

increasingly wide access to global gas markets. This enhances the maturity of the Polish market, and the entities operating in it have started normal market competition. In this context, gas storage facilities

gain a new functionality which consists in their use for so-called “gas parking”.

No Elements of the Transmission System Unit Total

1 system gas pipelines km 11,008.3

inc

lud

ing

SGT Infrastructure km 684.8

GAZ-SYSTEM S.A. infrastructure, E-gas km 9,675.1

GAZ-SYSTEM S.A. infrastructure, Lw-gas km 648.4

2 system nodes units 57

inc

lud

ing

GAZ-SYSTEM S.A. infrastructure, E-gas units 57

3 gas stations units 886

inc

lud

ing

SGT Infrastructure units 2

GAZ-SYSTEM S.A. infrastructure, E-gas units 812

GAZ-SYSTEM S.A. infrastructure, Lw gas units 72

4 gas compressor stations units 19

inc

lud

ing

SGT Infrastructure units 5

GAZ-SYSTEM S.A. infrastructure, E-gas units 14

GAZ-SYSTEM S.A. infrastructure, Lw gas units 0

Figure 3. Low-methane natural gas system

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Table 3. Maximum capacities of storage facilities in the 2014/2015 season

Storage Working volume Max injection capacity Max withdrawal capacity

million m3

GWh million m3 /day GWh/day million m3 /day GWh/day

Underground gas storages in depleted natural gas deposits

Wierzchowice 1200 13,200 6.0 66.0 9.6 105.6

Husów 500 5,625 4.15 46.7 5.76 64.6

Strachocina* 360 4,050 2.64 29.7 3.36 37.9

Swarzów 90 1,008 1.0 11.2 1.0 11.2

Brzeźnica 65 731.3 1.1 12.4 0.93 10.4

TOTAL UGS 2,215 24,614.3 14.89 166.0 20.65 229.7

Cavern Underground Gas Storage facilities in leached salt caverns

Mogilno** 407.9 4,543.9 9.6 106.9 18.0 200.5

Kosakowo*** 51.2 570.9 2.4 26.8 4.8 53.5

TOTAL CUGS 459.1 5114.8 12 133.7 22.8 254

TOTAL 2,674.1 29,729.1 26.89 299.7 43.45 483.7

Source: Storage System Operator

*the maximum technical gas injection capacity at the beginning of the cycle is 3.84 billion m3/d. Owing to the capabilities of the GAZ-SYSTEM S.A. transmission system, capacity allocation at MFPWEOSM1 is 2.88 million m3/d for continuous service and 0.48 million m3/d for interrupted service.

** working volume, including 50 million m3 of GAZ-SYSTEM S.A. volume for transmission system balancing purposes

***under construction, planned working volume of 250 million m3 according to the Storage System Operator

1 MFPWEOSM – Interconnection Physical Entry Points to the transmission system at interconnections with storage facilities, referred to as interconnection physical entry points

Figure 4. Location of underground gas storages

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3. CONSIDERATIONS OF NATIONAL TRANSMISSION SYSTEM DEVELOPMENT

3.1. Considerations arising from the Energy Policy

Part A of the National Development Plan 2016-2025 assumes that investment measures will be completed in the NTS by 2025, which assure the achievement of the objectives set in “Poland’s Energy

Policy until 2030” (PEP 2030) in order to increase energy security of the country, liberalise the Polish gas market, ensure integration with the neighbouring countries’ markets, improve competition

and assure conditions for intensive development of the national economy and the enterprises operating within the economy.

The specific objectives in this area, in the context of the activities of the transmission system operator, include:

→ Ensuring alternative directions of gas supply to Poland;

→ Expansion of the NTS.

Poland’s energy policy assumes that the main objective is to ensure energy security of the country which can be achieved through measures including:

→ Maintaining and increasing the transmission capacity and the development and protection of infrastructure;

→ Development of a competitive gas market;

→ Development of new technologies in the natural gas sector.

It should be emphasised that the National Development Plan 2016-2025 ensures the achievement of the above-mentioned strategic objectives to the highest possible extent, with optimal development

expenditure and operating costs of the transmission system.

3.2. Considerations arising from the Community-wide ten-year development plan

The TYNDP (Ten-Year Network Development Plan) prepared by ENTSOG,

the association of European operators of natural gas transmission infrastructure, is a major document determining the development of transmission infrastructure in the European Union.

The fourth edition of TYNDP 2015 was published on 16 March 2015. The main objective of the investment measure provided for in TYNDP is to achieve the European energy targets such as:

→ Security of supply;

→ Sustainable development of gas transmission systems;

→ Creating conditions for the functioning of the European gas market.

TYNDP 2015 provides for about 260 projects, with a large share of projects in the Central-Eastern and

South-Eastern Europe, and the Baltic Sea Region, which reflects the scale of investment needs in those regions. Poland is one of the countries in which the highest investment level is planned. The National

Development Plan 2016-2025 is consistent with TYNDP 2015.

GAZ-SYSTEM S.A. submitted information on the following investment projects for TYNPD 2015:

→ Projects under implementation:

� Construction of the LNG Terminal in Świnoujście;

� Expansion of the transmission infrastructure in North-Western Poland;

→ Planned projects:

� Poland - Czech Republic connection;

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� Western line of the North-South Corridor in Poland;

� Poland-Slovakia connection;

� Eastern line of the North – South Corridor in Poland;

� Expansion of the Poland – Germany connection in Lasów;

� Poland - Lithuania connection (GIPL);

� Expansion of the LNG terminal in Świnoujście;

� Poland – Denmark connection (Baltic Pipe);

� Expansion of exit points from SGT.

On proposal of the European Commission of April 2015 concerning infrastructural projects

in South-Eastern Europe, TYNDP 2015 was additionally supplemented (Annex I) by eight projects, including the gas interconnection project between Poland and Ukraine submitted by

GAZ-SYSTEM S.A. and PJSC “UKRTRANSGAZ”.

TYNDP 2015 was issued by ENTSOG on 16 March 2015, whereas information

on projects that had been provided under an additional call was published in a separate supplement to Annex 1 to TYNDP 20152. The supplement included eight projects, including a gas interconnection

project between Poland and Ukraine which was reported by GAZ-SYSTEM S.A. and PJSC “UKRTRANSGAZ”.

3.3. Considerations arising from the SoS Regulation

At the EU level, the rules for ensuring supply security were defined Regulation (EU) No 994/2010 of the European Parliament and of the Council of 20 October 2010 concerning measures to safeguard

security of gas supply (“SoS Regulation”). The regulation sets forth the security standards that must be met by all EU member states:

→ Infrastructure standard – EU member states must have the capacity to supply gas quantities necessary to satisfy the total gas demand on a day of extraordinarily high gas demand in case of

disruptions in the operation of the single largest infrastructure (N-1).

→ Supply standard – natural gas undertakings are required to guarantee security of supply to

protected customers for a defined time period in case of persisting extreme temperatures or in case infrastructure disruptions in the winter period.

According to the SoS Regulation, member states:

→ Assess the risk related to security of supply;

→ Prepare Preventive Action Plans. According to the recent edition of the above documents (2014), N-1 for Poland has increased

compared with the previous one (102.3% in 2013) and stands at 103.7%. The volume of gas was also calculated which allows the supply standard requirements to be met for natural gas customers

belonging to the protected customer group, as well as the way of covering it.

2http://www.entsog.eu/publications/tyndp#ENTSOG-TEN-YEAR-NETWORK-DEVELOPMENT-PLAN-2015

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3.4. Considerations arising from the Energy Security Strategy of the European Union

The Energy Security Strategy of the European Union is based on an in-depth analysis of energy dependence of the member states. It identifies the areas in which decisions must be taken or specific

measures must be implemented in the medium and short term and which are to lead to strengthening the energy security of the EU member states. The list prepared

by the European Commission includes the LNG Terminal in Świnoujście, interconnections between the Polish gas infrastructure and Lithuania, the Czech Republic and Slovakia, as well as the expansion of the

national natural gas transmission infrastructure in Poland as priority projects in terms of EU energy security.

Stress tests confirm that the countries of Central-Eastern and South-Eastern Europe

and the Baltic Sea region have high investment needs, including the expansion of internal infrastructure and bidirectional interconnections with neighbouring states in order to ensure technical access to

natural gas supply from alternative sources and directions.

3.5. Determinants of NTS development

The development of gas infrastructure in Poland is determined mainly by the following factors:

→ size of the forecasted gas demand and transmission service demand, including gas transit; → functional and technical security of transmission, including also interoperation of the transmission

system with UGS and domestic sources (conventional and non-conventional) and the capability to balance demand with imported gas;

→ integration of European Community markets, both through the construction of transmission corridors

and active creation of mechanisms stimulating the development of markets; → development of import and export connections.

Figure 5. Transmission system development considerations

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Demand is defined as forecasted demand for the transmission system including export needs.

Security of supply is defined as guaranteed stable gas supplies at a level that satisfies domestic needs. The directions of NTS development are pursued through defined investment activities provided for in the

National Development Plan 2016-2015 will satisfy the needs related to the diversification of the directions and sources of gas supply, and will reduce the sensitivity of the national transmission system to

disruptions in gas supply continuity. The tools that help to increase the degree of security will be the expansion of interconnections with the transmission systems of the neighbouring states, as well as the

expansion of the NTS that ensures flexible interoperation with domestic sources and underground gas storage facilities.

Market – integration of the European transmission system allowing free gas transmission is to ensure

competitive, secure and sustainable gas supply at prices acceptable to the economy and the public. A well-integrated gas transmission infrastructure will support the diversification of the sources and

directions of gas supply. This will enable the development of gas hubs. Access to alternative gas markets, which will be ensured through the deployment of transmission corridors, will have a positive

effect on the price conditions imposed on Polish fuel consumers.

Import / Export – Expansion of the NTS, including bidirectional interconnections, and increasing the functionality of the NTS interoperation with SGT are conducive to the development of an integrated

and competitive gas market in Central-Eastern Europe. Taking advantage of Poland’s geographical location, the NTS will be able to play a new role in transit. This way, business benefits will be achieved

also for enterprises operating in the market through access to global markets and the possibility to reduce gas transmission costs.

3.6. DEMAND FOR THE TRANSMISSION SERVICE

For the purposes of drafting the National Development Plan 2016-2025, a forecast of demand for the

transmission service was prepared for the GAZ–SYSTEM S.A. transmission network for 2015 - 2035. Two detailed forecast variants were prepared: Moderate Growth (MG) and Optimal Development (OD).

The following provided a basis for the transmission service demand forecasts with regard to domestic demand:

→ GUS statistical data on gas consumption broken down into administrative units and customer groups for the years 2009-2015;

→ GAZ-SYSTEM S.A. reporting data, including settlement data, for the years 2010-2014, and analyses of transmission system operation in the same period;

→ An analysis of investment plans in the electric power market based on signed connection contracts and connection conditions issued for potential customers in that sector of the

economy.

The main factors with the greatest impact on the demand for gas transmission in 2014 – 2023 will be:

→ The generation of electricity and heat from natural gas;

→ GDP growth; → Gas price.

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Table 3. Schedule of significance of factors affecting the forecast for the defined variants

Forecast variant

Moderate Growth Optimal Development

Electricity and heat generation

Increase in the level of contracts signed and investment projects

launched

Increase in the level of contracts signed and the most realistic

investments

GDP Low growth, possible recession Moderate growth, no recession

Gas price High growth owing to high demand

in the EU (import from Russia)

Moderate growth related to wider access to the EU single market and

the global LNG market

The greatest increase in demand for the gas transmission service is expected in the situation of

development of the gas-based power industry (mainly cogeneration). The commissioning of the facilities taken into account in the forecast may increase the demand for gas in the 2035 perspective:

→ by a minimum of approx. 1.3 billion m3 annually under the MG forecast, → by a maximum of approx. 4.7 billion m3 annually under the OD forecast.

Changes in the electric power market will have the largest impact on the future gas demand and the dynamics of changes in the quantity of gas transmitted. The other factors are of lesser

significance to the forecast results (not exceeding 10-20 percent), but they should be considered jointly, as they are interrelated. Each of the forecasts is reflected in the investment activities witnessed in the

market and in preparatory work related to the construction of new generating capacity. Some of the projects are in the implementation phase, some are pending investment decision, and the rest are still

at an early planning stage. A considerable number of those new power units are considered on the basis of gaseous fuel. GAZ-SYSTEM S.A. has signed a number of contracts for the connection of power

facilities which, if completed, may lead to a substantial increase in the annual gas demand.

In the opinion of GAZ-SYSTEM S.A. not all facilities will be completed, at least not in the short term. This

results from the fact that some of the connection contracts concluded are conditional contracts, and some of the contracts concluded previously have recently been terminated in the absence of

investors’ decision to invest. In connection with the above, it was necessary to carry out analyses for which assumptions were made including the following:

→ for several existing gas customers the forecasted quantities were reduced to the capacity allocation level requested by the customer;

→ certain potential customers were excluded from the forecasts, e.g. in the case several customers applied at one point, seeking connection to the power network;

→ only those customers were taken into consideration that had concluded connection contracts and were carrying on projects or preparatory work (selection of contractors, design work) for their

projects.

Based on the results of the analyses. two forecast variants were developed.

I. The Moderate Growth Variant of demand for the transmission service, treated as a static base for the other variant, was determined on the basis of performance of transmission contracts

concluded, plus quantities specific in signed connection contracts for commenced projects

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involving the construction of new steam-and-gas units at three locations. At present, this forecast

variant is regarded as a realistic one. II. The Optimal Development Variant additionally provides for an increase in demand resulting

from signed connection contracts for the Płock CHP, Toruń CHP, Żerań CHP and Łagisza CHP in the quantities declared by them.

The Optimal Development Variant can be considered feasible because each of the qualified facilities may soon switch into the implementation stage in the face of change of market sentiment for gas or

the award of contracts under the tendering procedures pending. The growth in domestic demand between the Moderate Growth Variant and the Optimal Development Variant is taken into

consideration in the planning of the development of the transmission system.

Compared with the forecast presented in the Development Plan for 2014-2013, a significant adjustment

of forecast results has arisen, related to major changes in the electric power market. A significant decline in interest is seen among potential investors in the construction of new gas-based generating

units - approx. 50% for the Optimal Growth Option in 2020 (the nearest investment horizon). This decline results from the fact that some investors have discontinued work related to the construction of new gas

power stations and the replacement of obsolete coal-fire units with steam-and-gas units in large combined heat and power plants situated in major urban agglomerations.

At present, it is hard to unambiguously determine whether the future “will see a return to those projects or they will be definitively abandoned”.

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Chart 1. Forecast variants – annual demand for the transmission service (domestic demand).

The domestic demand forecast is not the only determinant in planning the volume of demand for the transmission service, which should additionally take into account possible needs of gas transit and

export, which will be facilitated by the expansion of interconnections with the neighbouring countries. An increased interest has recently been witnessed in the provision of

such services by GAZ-SYSTEM S.A., especially for Ukraine-bound flows. In this regard, joint work has been conducted with PJSC Ukrtransgaz, on the implementation on projects both on the Polish and the

Ukrainian side. Moreover, in 2015, design work started on the Poland – Lithuania interconnector whose main objective will be to integrate the gas markets of the Baltic States with the EU markets, which

means that it will be possible to use the pipeline for intra-Community gas transmission. Interest in gas transmission should also be expected to the Czech Republic, Slovakia and Germany, which has been

taken into account in the currently proposed scope of infrastructure expansion.

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Chart 2. Forecast variants for peak demand (domestic demand).

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4. DEVELOPMENT PLAN FOR 2016-2025

PART A

GAZ-SYSTEM S.A. INFRASTRUCTURE DEVELOPMENT

4.1. Introduction

This Development Plan for 2016-2025 is a continuation of transmission infrastructure development

programmes defined in the Development Plan for 2014-2023. It provides for a number of projects related to the expansion and modernisation of the internal transmission system and the deployment of

new interconnections with the systems of neighbouring countries. The implementation of the projects included in this Plan should ensure the capability of gas transmission to current and new customers. In

addition, owing to the seasonal nature of gas demand, and the limited flexibility of import contracts, the execution of tasks by GAZ-SYSTEM S.A. should be supported by the construction of new storage

facilities interoperating with the transmission system. GAZ-SYSTEM S.A. is currently carrying on work related to the assessment of the feasibility and conditions for the construction of new storage facilities.

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Figure 7. Investment projects planned in 2016 – 2015

Project Diameter DN [mm] Length

[km] INVESTMENTS IN 2020 PERSPECTIVE

1 Lwówek – Odolanów 1000 168 2 Czeszów – Wierzchowice 1000 14 3 Czeszów – Kiełczów 1000 33 4 Polkowice – Żary 300 64 5 Zdzieszowice – Wrocław 1000 130 6 Zdzieszowice – Kędzierzyn 1000 19 7 Poland - Czech Republic 1000 54 8 Tworóg – Kędzierzyn 1000 43 9 Tworóg -Tworzeń *** 1000 56 10 Pogórska Wola – Tworzeń *** 1000 160 11 Strachocina – Pogórska Wola *** 1000 98 12 Poland – Slovakia *** 1000 58 13 Hermanowice – Strachocina 700 72 14 Rembelszczyzna - Mory 700 28 15 Mory – Wola Karczewska 700 91 16 Poland – Lithuania *** 700 357 17 Leśniewice – Łódź 700 76 18 Goleniów – Płoty *** 700 41 19 Wiczlino – Reszki *** 700 8 20 Mory – Piotrków Tryb. 400 6 21 Lewin Brzeski – Nysa 300 38

INVESTMENTS IN 2025 PERSPECTIVE 22 Jeleniów – Taczalin 700 90 23 Rembelszczyzna – Wola Karczewska 1000 54 24 Wola Karczewska – Wronów *** 1000 81 25 Rozwadów – Końskowola – Wronów*/*** 700 103 26 Jarosław – Rozwadów*/*** 700 60 27 Hermanowice – Jarosław *** 700 39 28 Swarzów - Rozwadów 700 133 29 Baltic Pipe*/** - 30 Damasławek – Mogilno*/** 1200 50 31 Mogilno – Odolanów** 1000 150 32 Polkowice – Legnica* 300 46 33 Damasławek CUGS

*analysis and planning phase **investment projects excluded from approval by President of ERO ***investment projects for which the President of ERO has withheld approval of the capital expenditure level

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4.2. DEVELOPMENT PLAN implementation results

Apart from ensuring a high degree of diversification of gas transmission sources and directions, the expansion of the transmission network proposed in the draft Development Plan for 2016-2025,

including especially interconnections, will provide access to competitive markets. In the 2020 perspective, as a result of implementation of the projects provided for in this Development

Plan for 2016-2025, further improvement will be witnessed of the degree of diversification of the directions and

sources of supply.

Chart 3. Change in the degree of diversification in 2016 and 2020

Owing to the expansion and construction of new bidirectional interconnections, a high degree of energy security of the country will be achieved. This is fully in line with one

of the main directions of Poland’s Energy Policy until 2030.

As a result of the continued expansion of the national transmission system and the construction of new cross-border interconnections, its transmission capacity will increase. By 2020, as a result of the

implementation of the planned development programmes, the technical import capacity situated at the eastern border will be fully replaceable by EU import sources. In addition to ensuring a high degree

of diversification of supply directions, it is important to create technical access capabilities to alternative western markets. Provided below is a table presenting the technical capacity for gas import.

It should be noted that it does not include the existing eastern direction, as no investments are currently planned in the development of those interconnections (Tietierovka, Vysokoye). One exception is the

interconnection with Ukraine which is currently being jointly analysed by the Polish and Ukrainian operators. Supply resulting from the provision of a new PL-UA interconnection is considered irrespective

of the existing supply from that direction.

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Chart 4. Tangible effects of the implementation of the draft Development Plan for 2016-2025

At the end of the planning period, a new system of MOP 8.4 MPa trunk transmission gas pipelines will be established, covering the entire territory of Poland.

The transit location of the country may be conducive to the growth of both gas imports and exports, allowing surplus volumes to be placed on liquid markets of the neighbouring countries. An increased

degree of integration with the EU member states and the development of a modern, flexible infrastructure within the country will facilitate the creation of a gas hub in Poland that would accelerate

the development of the national trading market.

Σ 2,463

length [km]

dia

me

ter

[mm

]

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4.3. List of selected investment projects included in the DEVELOPMENT PLAN

Table 4. List of selected investment projects included in the DEVELOPMENT PLAN

Project Expected project

completion period 2016-2020 2021-2025

LOWER SILESIAN VOIVODSHIP Polkowice - Żary DN 300 gas pipeline, L= 66 km, in the territory of the Lower Silesian voivodship

x

Czeszów – Wierzchowice DN 1000 gas pipeline, L= 14 km x Czeszów – Kiełczów DN 1000 gas pipeline, L= 33 km x Zdzieszowice - Wrocław DN 1000 gas pipeline, L= 130 km (Brzeg - Zębice section) in the territory of the Lower Silesian voivodship

x

Gas supply to the Kłodzko Valley (Lubiechów - Wałbrzych, Uczniowska St.) x Gałów – Kiełczów DN 500 gas pipeline, L= 42 km x Construction of the Jeleniów II compressor station x Construction of the Kiełczów metering station on the Oleśnica-bound line x Construction of the Krzewie Wielkie emergency system x Reconstruction of the Pressure Reduction and Metering Station in Strzegom, Piłsudskiego St.

x

Reconstruction of the Mielnik Pressure Reduction and Metering Station x Modernisation of the Pressure Reduction and Metering Station in Strzegom, Armii Krajowej St.

x

Reconstruction of the Pressure Reduction and Metering Station in Świebodzice, Kamiennogórska St.

x

Modernisation of the Stanowice Pressure Reduction and Metering Station x Modernisation of the Lubań Pressure Reduction and Metering Station x Modernisation of the Leśna Pressure Reduction and Metering Station x Reconstruction of the Gałów Pressure Reduction and Metering Station x Construction of the Mirsk/Krzewie Pressure Reduction and Metering Station x

KUYAVIAN-POMERANIAN VOIVODSHIP Reconstruction of the Gustorzyn gas distribution node x Connection to the transmission network of gas facilities and installations situated at the Toruń CHP

x

Connection to the transmission network of gas facilities and installations situated at the Grudziądz Power Plant

x

Connection to the transmission network of the distribution network of PSG Sp. z o.o. in Kruszwica supplying gas to customers in the territory of the Kuyavian-Pomeranian voivodship

x

LUBELSKIE VOIVODSHIP Construction of Rozwadów – Końskowola – Wronów DN 700 gas pipeline, L = 103 km in the territory of the Lubelskie voivodship

x

Swarzów – Rozwadów DN 700 gas pipeline, L= 133 km in the territory of the Lubelskie voivodship

x

Wola Karczewska - Wronów DN 700 gas pipeline, L= 81 km, in the territory of the Lubelskie voivodship

x

Modernisation of the Rembelszczyzna - Wronów DN 500 gas pipeline - installation of sluices and preparation for pipeline pigging in the territory of the Lubelskie voivodship

x

Reconstruction of the Rozwadów-Końskowola DN 700 - modernisation of watercourse crossings including the reconstruction of block valve stations in the vicinity of the crossings

x

Reconstruction of the Rudnik Pressure Reduction and Metering Station x Reconstruction of the Nałęczów Pressure Reduction and Metering Station x

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Project Expected project

completion period 2016-2020 2021-2025

LUBUSKIE VOIVODSHIP Polkowice - Żary DN 300 gas pipeline, L= 66 km in the territory of the Lubuskie voivodship

x

Modernisation of the Gorzów Wielkopolski Pressure Reduction and Metering Station

x

ŁÓDŹ VOIVODSHIP Mory - Piotrków Tryb. DN 400 gas pipeline, Wolbórz - Piotrków Tryb. section, L= 6 km

x

Leśniewice – Łódź DN 700 gas pipeline, L= 66 km in the territory of the Łódź voivodship

x

Construction of the Meszcze Metering Station x Reconstruction of the Łęczyca Pressure Reduction and Metering Station x

LESSER POLAND VOIVODSHIP Reconstruction of the DN 500 gas pipeline section in an active landslide area in the village of Gaj, municipality of Mogilany

x

Modernisation of the Wygoda - Warzyce DN 250 gas pipeline x Reconstruction of the Tarnów Zach. – Łukanowice - Śledziejowice DN 250, L= 62 km with branches to gas stations

x

Conversion of the Sędziszów – Tarnów Mościce gas pipeline from DM 400 to DN 250, L= 8 km with branches to gas stations

x

Construction of the crossing of the Dunajec River in Biskupice Radłowskie for the Łukanowice-Swarzów DN 300 gas pipeline, L= 0,8 km

x

Reconstruction of the Korabniki – Zabierzów DN 250 gas pipeline, L= 3,1 km x Reconstruction of the Śledziejowice – Skawina DN 400 gas pipeline, L= 2,7 km x Pogórska Wola - Tworzeń DN 1000 gas pipeline, L= 160 km in the territory of the Lesser Poland voivodship

x

Strachocina - Pogórska Wola DN 1000 gas pipeline, L= 98 km in the territory of the Lesser Poland voivodship

x

Swarzów – Rozwadów DN 700 DN 1000 gas pipeline, L= 133 km in the territory of the Lesser Poland voivodship

x

Sędziszów - Tarnów DN 400 gas pipeline - construction of a crossing of the Wisłoka River using the directional boring method, L= 0,3 km

x

Reconstruction of the Zederman - Tworzeń gas pipeline, branch to the Olkusz pressure reduction and metering station

x

Reconstruction of the Zederman - Tworzeń gas pipeline, branch to the Sławków pressure reduction and metering station

x

Pogórska Wola Compressor Station - construction of 6 individual dry coolers x Reconstruction of the Sędziszów Node x Construction of the Metering Station in Krakow, Mistrzejowska St. x Reconstruction of the Skawina – Koncentraty Pressure Reduction and Metering Station

x

Reconstruction of the Śledziejowice Pressure Reduction and Metering Station x Reconstruction of the Wieliczka Pressure Reduction and Metering Station x

MASOVIAN VOIVODSHIP Poland – Lithuania DN 700 gas pipeline, L= 357 km in the territory of the Mazovian voivodship

x

Rembelszczyzna – Mory DN 700 gas pipeline, L= 29 km x Mory - Wola Karczewska DN 700 gas pipeline, L= 80 km including a branch to Sękocin, L= 11 km

x

Leśniewice – Łódź DN 700 gas pipeline, L= 66 km in the territory of the Mazovian voivodship

x

Rembelszczyzna - Wola Karczewska DN 700 gas pipeline, L= 54 km x Wola Karczewska - Wronów DN 700 gas pipeline, L= 81 km in the territory of x

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Project Expected project

completion period 2016-2020 2021-2025

the Mazovian voivodship Expansion of the Rembelszczyzna Compressor Station x Expansion of the Rembelszczyzna Compressor Station - Stage III (Poland – Lithuania)

x

Modernisation of the Hołowczyce II Compressor Station x Modernisation of the Hołowczyce Compressor Station – SCADA and ESD systems

x

Construction of the Łosice Pressure Reduction and Metering Station x Construction of the Konopki Pressure Reduction and Metering Station x Modernisation of the Uniszki Zawadzkie Pressure Reduction and Metering Station

x

Reconstruction of the Reguły Pressure Reduction and Metering Station x Connection to the transmission network of the distribution network of PSG Sp. z o.o. supplying gas to customers in the municipalities of Radzymin, Dąbrówka and Zabrodzie, in Wólka Radzymińska

x

Connection to the transmission network of the distribution network of PSG Sp. z o.o. supplying gas to customers in the Warsaw area and in the municipalities of Jabłonna and Legionowo, in Jabłonna

x

Connection to the transmission network of gas facilities and installations of the steam-and-gas unit at the Żerań CHP (PGNiG TERMIKA S.A.)

x

Connection to the transmission network of the distribution network of PSG Sp. z o.o. supplying gas to customers in the municipalities of Michałowice, Pruszków and Brwinów

x

Connection to the transmission network of the distribution network of PSG Sp. z o.o. in the municipalities of Ząbki, Zielonka, Marki, Warsaw Praga Południe, Warsaw Rembertów

x

Connection to the transmission network of the distribution network of PSG Sp. z o.o. in the municipalities of Regimin, Ciechanów, the municipalities of Przasnysz and Chorzele

x

Connection to the transmission network of gas facilities and installations of the PEC Legionowo steam-and-gas unit in Legionowo

x

Connection to the transmission network of gas facilities and installations of PKN ORLEN S.A. w Płock

x

OPOLSKIE VOIVODSHIP Tworóg – Kędzierzyn DN 1000 gas pipeline, L= 47 km x Tworóg – Kędzierzyn DN 1000 gas pipeline, L= 56 km x Zdzieszowice - Wrocław DN 1000 gas pipeline, L= 130 km (Zdzieszowice – Brzeg section) in the territory of the Opolskie voivodship

x

Kędzierzyn – Polish border (Poland - Czech Republic) gas pipeline, L= 55 km x Lewin Brzeski - Nysa DN 300 gas pipeline, L= 38 km x Modernisation of the Szobiszowice - Blachownia gas pipeline branch to the Pressure Reduction and Metering Station at Kędzierzyn-Koźle, Piastów housing estate

x

Reconstruction of the Obrowiec - Racibórz gas pipeline, Obrowiec - Odra River section

x

Modernisation of the Radlin - Racibórz DN 300 gas station, L = 21 km x Reconstruction of the Zdzieszowice - Wrocław gas pipeline, branch to the Opole Zachód Pressure Reduction and Metering Station

x

Reconstruction of the Komorzno-Tworóg DN 500 gas pipeline - Line I x Reconstruction of the Komorzno-Tworóg DN 500 gas pipeline - Line II x Construction of the Kędzierzyn compressor station x Zdzieszowice – Kędzierzyn DN 1000 gas pipeline, L= 19 km x Construction of the Brzeg Pressure Reduction and Metering Station x

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Excerpt 29

Project Expected project

completion period 2016-2020 2021-2025

Construction of the Żerkowice Pressure Reduction and Metering Station x Construction of the Przywory 1 Pressure Reduction and Metering Station x Construction of the Przywory 2 Pressure Reduction and Metering Station x Construction of the Obrowiec Pressure Reduction and Metering Station x Construction of the Lewin Brzeski Pressure Reduction and Metering Station x Construction of the Grodków Pressure Reduction and Metering Station x Construction of the Nysa Pressure Reduction and Metering Station x

SUBCARPATHIAN VOIVODSHIP Hermanowice - Strachocina DN 700 gas pipeline, L= 80 km x Strachocina - Pogórska Wola DN 1000 gas pipeline, L= 98 km in the territory of the Subcarpathian voivodship

x

Strachocina - Polish border (Poland- Slovakia) DM 1000 gas pipeline, L= 58 km

x

Rozwadów - Końskowola – Wronów DN 700 gas pipeline, L= 103 km in the territory of the Subcarpathian voivodship

x

Jarosław – Rozwadów DN 700 gas pipeline, L= 60 km x Hermanowice – Jarosław DN 700 gas pipeline, L= 39 km x Jarosław - Stalowa Wola DN 300 gas pipeline, Kopki - Stalowa Wola section, L= 30 km

x

Reconstruction of the Stalowa Wola - Sandomierz DN 250/300 in the Stalowa Wola - Zbydniów section

x

Reconstruction of the DN 100 gas pipeline to the Nowa Dęba Pressure Reduction and Metering Station, L= 3 km

x

Reconstruction of the DN 150 gas pipeline to the Skopanie Pressure Reduction and Metering Station, L= 8,4 km

x

DN 700 gas pipeline - construction of a new crossing under the bottom of the Wisłok River in Rzeszów using the directional boring method

x

Adjustment of the State Border-Jarosław DN 700 gas pipeline for smart pig inspection

x

Rozwadów - Puławy DN 700 gas pipeline - construction of a crossing under the bottom of the San River using the directional boring method in Karnaty, L= 1.2 km

x

Reconstruction of the Rozwadów-Końskowola DN 700 - modernisation of watercourse crossings including the reconstruction of block valve stations in the vicinity of the crossings

x

Reconstruction of the Strachocina - Warzyce DN 300 gas pipeline - construction of new crossings of the Wisłok River at Krościenko Wyżne and at Krosno - Białobrzegi

x

Construction of the Strachocina Compressor Station x Modernisation of a compressor station at the Jarosław Field Operation Unit (TJE)

x

Jarosław I compressor station - reconstruction of dry cooling units of GMVH-8 engine compressors

x

Reconstruction of the Warzyce Node x Reconstruction of the Turaszówka Node x Reconstruction of the Wygoda Node x Reconstruction of the Leżajsk Pressure Reduction and Metering Station x Construction of a regulation and metering station at the Metering Station in Tuszyma

x

Reconstruction of the Skołoszów Pressure Reduction and Metering Station x Reconstruction of the Kolbuszowa Pressure Reduction and Metering Station x

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NATIONAL TEN-YEAR GAS TRANSMISSION NETWORK DEVELOPMENT PLAN EXCERPT

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Project Expected project

completion period 2016-2020 2021-2025

Reconstruction of the Pressure Reduction and Metering Station in Stalowa Wola, Sudoły housing estate

x

Reconstruction of the Skopanie Pressure Reduction and Metering Station x PODLASKIE VOIVODSHIP

Poland – Lithuania DN 700 gas pipeline, L= 357 km in the territory of the Podlaskie Voivodship

x

POMERANIAN VOIVODSHIP Wiczlino – Reszki DN 700 gas pipeline, L= 8 km x

SILESIAN VOIVODSHIP Tworóg – Kędzierzyn DN 1000 gas pipeline, L= 56 km x Tworóg – Kędzierzyn DN 1000 gas pipeline, L= 47 km x Pogórska Wola - Tworzeń DN 1000 gas pipeline, L= 160 km x Wapienica – Żywiec DN 250 gas pipeline, branch to the Buczkowice Pressure Reduction and Metering Station

x

Reconstruction of the Zelczyna- Oświęcim gas pipeline x Reconstruction of the Wapienica - Żywiec DN 300 and DN250 gas pipeline x Reconstruction of the Komorowice - Skoczów DN 300 gas pipeline x Reconstruction of the DN 65 connection gas pipeline to the Grójec Pressure Reduction and Metering Station

x

Reconstruction of the connection gas pipeline to the Oświęcim Nowa Pressure Reduction and Metering Station

x

Reconstruction of the Komorzno-Tworóg DN 500 gas pipeline - Line I x Reconstruction of the Komorzno-Tworóg DN 500 gas pipeline - Line II x Modernisation of the Oświęcim - Szopienice gas pipeline x Modernisation of the Trzebiesławice – Częstochowa gas pipeline, branch to the Huta Zawiercie Pressure Reduction and Metering Station

x

Reconstruction of the Bielsko-Biała Szyndzielnia Pressure Reduction and Metering Station

x

Reconstruction of the Oświęcim Monowice Pressure Reduction and Metering Station

x

Reconstruction of the Miedźna Pressure Reduction and Metering Station x Reconstruction of the Bielsko-Biała Wapienica Pressure Reduction and Metering Station

x

Connection to the transmission network of gas facilities and installations of the steam-and-gas unit at the Łagisza CHP

x

Connection to the transmission network of the distribution network of PSG Sp. z o.o. supplying gas to customers in Korfantów

x

ŚWIĘTOKRZYSKIE VOIVODSHIP Reconstruction of the Sandomierz - Stalowa Wola DN 250 gas pipeline, Sandomierz - Zaleszany section, L = 11.5 km

x

Pogórska Wola - Tworzeń DN 1000 gas pipeline, L= 160 km in the territory of the Świętokrzyskie voivodship

x

Swarzów – Rozwadów DN 700, L= 133 km in the territory of the Świętokrzystkie voivodship

x

VARMIAN-MASURIAN VOIVODSHIP Poland – Lithuania DN 700 gas pipeline, L= 357 in the territory of the Varmian-Masurian voivodship

x

GREATER POLAND VOIVODSHIP Lwówek – Odolanów DN 1000 gas pipeline, L= 165 km in the territory of the Greater Poland voivodship

x

Reconstruction of the Adamów - Wrocławek DN 500 gas pipeline at the Kiełbaska River crossing

x

Odolanów Compressor Station – Stage 0 (relocation of compressors) x

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NATIONAL TEN-YEAR GAS TRANSMISSION NETWORK DEVELOPMENT PLAN EXCERPT

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Project Expected project

completion period 2016-2020 2021-2025

Modernisation of the Kotowo Compressor Station (Solar II) x Modernisation of the Lwówek Node x Reconstruction of the Robczysko Pressure Reduction and Metering Station x Modernisation of the Śrem Pressure Reduction and Metering Station x Modernisation of the Borek Pressure Reduction and Metering Station x Modernisation of the Pogorzela Pressure Reduction and Metering Station x

WEST POMERANIAN VOIVODSHIP Szczecin – Gdańsk DN 700 gas pipeline, Section V Goleniów - Płoty, L= 45 km x Reconstruction of the Goleniów - Police DN 500 gas pipeline in the Olszanka Nature Preserve area

x

Modernisation of the Stepnica Pressure Reduction and Metering Station x

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NATIONAL TEN-YEAR GAS TRANSMISSION NETWORK DEVELOPMENT PLAN EXCERPT

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PART B

DEVELOPMENT OF THE SGT INFRASTRUCTURE

The owner of the SGT is EuRoPol GAZ s.a., a company established for the construction and operation of

the Gas Transit System within the territory of Poland under the Agreement between the Government of the Republic of Poland and the Government of the Russian Federation on the construction of a gas

pipeline system for the transit of Russian gas across the territory of the Republic of Poland and the supply of Russian gas to the Republic of Poland dated 25 August 1993.

On 18 July 2008, the President of the Energy Regulatory Office issued decision No

PPG/102/3863/W/2/2008/BP granting EuRoPol GAZ s.a. a licence for the transmission of gaseous fuels for the period ending 31 December 2025. Based on the above-mentioned decision, the Company

provides gas transmission services with the use of the SGT transmission system.

On 17 November 2010, the President of the Energy Regulatory Office issued a decision (ref. DPE-4720-4(8)/2010/6154/BT) appointing GAZ-SYSTEM S.A. as operator of the Polish section of the Yamal pipeline

for the period ending 31 December 2025.

The primary objective of the SGT Development Plan is to ensure the security, continuity, reliability and

optimisation of gas transmission while minimising the transmission service cost and given the effect of transmission of gas quantities supplied by the Company’s customers in accordance with the SGT

transmission capacity made available.

The Transit Gas Pipeline System consists of:

→ a 8.4 MPa DN 1400 MOP gas pipeline of approx. 684 km in length, → five compressor stations: Kondratki, Zambrów, Ciechanów, Włocławek, Szamotuły,

→ gas stations

Part B of the National Development Plan 2016-2025 was developed in collaboration with EuRoPol GAZ s.a. For the years 2016-2022, consistency was maintained between the draft development plan prepared by EuRoPol GAZ s.a. in compliance with the provisions of Article 16 (1) of the Energy Law and this document.

Part B of the National Ten-Year Transmission System Development Plan presents investment projects in

the SGT infrastructure owned by the EuRoPol Gaz s.a. Transit Gas Pipeline System in which GAZ-SYSTEM S.A. acts as operator under the ISO formula. The preparation of Part B fulfils the obligation arising from

the provisions of Article 16 (2) of the Energy Law, in conjunction with Article 9h par. 7 (6), par. 8 (6) and par. 12 and Article 9h1 par. 7 (3) of the Energy Law. The investment projects in SGT infrastructure are

mainly of a modernisation/replacement nature and are aimed to ensure the security, continuity, reliability and optimisation of gas transmission while minimising the transmission service cost and given

the transmission effect in accordance with the transmission capacity made available. In addition, it is planned to increase the degree of interoperability of the SGT infrastructure with the GAZ-SYSTEM S.A.

transmission infrastructure through the construction of new connections between them. EuRoPol GAZ s.a.

During the 2015-2022 period, the existing transmission capacity of the SGT infrastructure is assumed to be maintained in the East – West direction, with the transmission capacity in the West-East direction being

gradually increased. As part of the measures aimed to increase the transmission capacity in the West –

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NATIONAL TEN-YEAR GAS TRANSMISSION NETWORK DEVELOPMENT PLAN EXCERPT

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East direction, adjusting activities are carried on for further expansion of the Mallnow entry point bound

for Poland.

The investments planned in the SGT infrastructure include:

→ modernisation of compressor station equipment, installations and facilities, including control,

protection and data archiving systems,

→ modification and modernisation of communication and SCADA systems,

→ tasks arising from technical inspections and environmental checks, and those improving OHS

conditions,

→ connection of new customers in accordance with connection conditions issued and connection contracts signed.