Mission and strategy

Mission

• Our mission is to provide reliable and safe supplies of clean and environmentally friendly energy, using competitive and innovative energy solutions.

• We are faithful to our tradition and committed to our customers who place confidence in us, however we are also open to change and ready to face new challenges.

• Acting in the interest of our shareholders, customers and employees, we wish to be a reliable and transparent partner, achieving growth of our company and its value in accordance with the principles of sustainable development.

The Strategy for the PGNiG Group Until 2015

The overarching strategic objective pursued by PGNiG SA is to achieve a shareholder value growth. The measures undertaken by PGNiG with a view to attaining the objective will focus on expanding the domestic gas market and strengthening the Company's presence on selected markets abroad.

The strategy for the PGNiG Group will be based on six strategic pillars:

• developing the trading business,
• securing natural gas supplies,
• developing the exploration and production business,
• expanding the existing and construction of new storage capacity,
• improving the profitability of the distribution operations,
• expanding the scope and scale of operations (extending the value chain).

The tasks assigned under the six strategic pillars will be performed in such a way as to ensure the right proportions and balance between them.

Developing the trading business

• Consolidating the dominant position on the domestic market by increasing the annual volume of gas sold to small and medium-size customers (i.e. customers buying less than 50m m³ of gas per year) on average by 1.5% and by increasing sales to large industrial customers (including by 100% to customers from the power and heat sector, e.g. through extension of the value chain and alliances).
• Ensuring market-level profitability of the gas trading business by undertaking activities aimed at changing the regulation of the gas sector in Poland and at reducing the costs of customer service.
• Developing a coherent trading policy for the PGNiG Group by enhancing the attractiveness of its offer for customers (new products and services, etc) and by streamlining the trading and marketing processes (call center, e-BOKs, etc).

Securing natural gas supplies

• Construction of new transmission facilities, enabling Poland to receive natural gas from different directions than those used to-date, through the implementation of the Skanled project, cooperation with OGP Gaz System S.A. which is executing the Baltic Pipe project, participation in the LNG Regasification Terminal project, construction of system interconnections on Poland's Western border in 2011 and on the Southern border in 2014, implementation of a number of complementary projects, as well as by taking steps to promote the development of the Polish gas transmission system.   
• Establishing appropriate structure of imports (40% from the East, 30% from the North and West, with the remaining 30% of supplies coming from the Company's own production). The Company plans to meet this objective by securing imports of 3.0 bcm - 4.5 bcm of natural gas in the years 2010-2014 until the strategic projects are completed, extension of the Yamal contract for another 15-20 years, signing a contract (contracts) for supplies of the natural gas to the LNG regasification terminal, reservation of up to 3.0 bcm annually of the capacities of the Skanled and Baltic Pipe gas pipelines, reservation of the Danish transmission system's capacity at a level corresponding to the reservation of the Skanled pipeline capacity, and reservation of approx. 1 bcm annually of the Nabucco gas pipeline's capacity.
• Conduct of international oil and gas trading - development of an appropriate organisation to conduct such operations.

Developing the exploration and production business

• Increasing own production of natural gas to approx. 6.2 bcm (high-methane gas equivalent) and of crude oil to approx. 1.8m tonnes annually in the coming years, by raising the production capacity of domestic natural gas to approx. 4.5 bcm (high-methane gas equivalent) and of crude oil to approx. 1.0m tonnes annually, and by starting production of oil and gas from fields located abroad in 2011 (after 2015, at least 1.5 bcm of the annual production of natural gas is to come from the equity gas reserves on the Norwegian Continental Shelf). In addition, PGNiG SA assumes that over the next five years the resources sustainability index will be maintained at a level of at least 1.1, and that the Company will maintain domestic licence areas of no less than 45-50 thousand square kilometres.
• Streamlining operations in the exploration and production segment by restructuring the PGNiG Group's exploration companies, improving the methodology of exploration work in Poland and introducing new systems for charging for work performed by the service companies.
• Positioning of PGNiG as a global gas player through the achievement of a significant position on key markets (including Algeria, Denmark, Egypt, Libya and Norway) and a visible profile on subsidiary markets (including India, Morocco, Germany, Pakistan, Tunisia and Great Britain).

Expanding the existing and construction of new storage capacity 

• Ensuring that sufficient storage capacity is available to accommodate the needs of PGNiG's customers and to secure compliance with statutory provisions concerning mandatory stocks, through expansion of the existing storage capacity, chiefly in respect of high-methane natural gas, by approx. 2 bcm, to a total target capacity of approx. 3.8 bcm in 2015.
• Establishment of the Storage System Operator.
• Provision of gas storage services on commercial terms - construction of underground storage facilities in cooperation with third-party partners to which third-party access will be provided on commercial terms.
• Improvement of the profitability of the storage business to 10%-11%.

Improving the profitability of the distribution operations

• Improvement of the profitability of the distribution business by maximising revenue streams from the regulated activities, as well as increasing ROE (return on capital employed) in the discussed segment to 7%-8% by 2015. 
• Cost optimisation through a reduction of operating costs and consolidation of the Group distribution companies' procurement processes.
• Optimum development of the distribution network - defining uniform rules for its expansion.

Expanding the scope and scale of operations (extending the value chain)

• Expansion of the PGNiG Group's operations through the extension of the value chain to include power generation, acquisition of capabilities in the area of CO₂ storage and coal gasification, extension of the value chain in the commodity chemical sector, and alliances with petrochemical companies.

For the realization of "the Strategy for the PGNiG Group Until 2015" the Company plans to spend around PLN 30bn.