PGNiG Upstream Norway AS, a subsidiary of Poland's state oil and gas giant, has signed an agreement to increase its share in the Gina Krog field on the Norwegian continental shelf in the run-up to the Baltic Pipe launch in an attempt to diversify Poland's energy supplies, the company said in a statement on Tuesday
WARSAW (Pakistan Point News / Sputnik - 11th February, 2020) PGNiG Upstream Norway AS, a subsidiary of Poland's state oil and gas giant, has signed an agreement to increase its share in the Gina Krog field on the Norwegian continental shelf in the run-up to the Baltic Pipe launch in an attempt to diversify Poland's energy supplies, the company said in a statement on Tuesday.
"PGNiG Upstream Norway AS has entered into an agreement with Aker BP ASA whereby it will acquire an interest in the Alve Nord discovery and increase its share in the Gina Krog field, positioning itself to send greater volumes of gas to Poland after the start-up of the Baltic Pipe," the statement read.
The deal envisages the increase of PGNiG Upstream Norway's share in the Gina Krog field by 3.3-11.3 percent, while its gas production will increase by an average of 100 million cubic meters (3 billion cubic feet) per year.
"The transaction is a perfect fit for the PGNiG Group's strategy. Firstly, it contributes to the diversification of gas supplies to our portfolio and strengthens Poland's energy security due to the build up of our own hydrocarbon resources. Secondly, increasing our working interest in the producing Gina Krog field will result in immediate growth of the company's production on the Norwegian Continental Shelf and PGNiG's EBITDA," Jerzy Kwiecinski, president of the corporation's management board, was quoted as saying in the statement.
Oil and gas production at the Gina Krog field began in 2017, amounting to 19.9 million barrels of oil equivalent in 2019, of which PGNiG's share was 1.6 million barrels per month. Gina Krog's oil and gas reserves are estimated at 172.5 million barrels.
Following the transaction, PGNiG Upstream Norway will own 31 licenses for production on the Norwegian continental shelf.
The agreement is yet to be approved by the Norwegian authorities, including the energy and finance ministries.
In 2016, Poland initiated the Baltic Pipe to transport gas directly from Norway, decreasing its dependence on supplies from Russia. In June 2017, the Polish and Danish heads of government signed a memorandum on the project's construction. According to the agreement, the project is to be implemented by 2022 and will cost approximately 1.7 billion Euros ($1.88 billion).
