• Natural Gas News

    PGNiG snaps up Norwegian gas assets from Ineos


PGNiG said the acquisition was a boost for Polish energy security.

by: Daniel Graeber

Posted in:

Natural Gas & LNG News, Europe, Top Stories, Premium, Corporate, Mergers & Acquisitions, Exploration & Production, News By Country, Denmark, Norway, Poland

PGNiG snaps up Norwegian gas assets from Ineos

Polish energy company PGNiG announced on March 25 it had agreed to acquire the entire Norwegian gas portfolio of UK group Ineos for $615mn, providing extra resources to feed into its Baltic Pipe project.

The company said the assets included 22 production licences and a stake in the Nyhamna terminal, an Equinor-operated facility that sends gas to the UK and European markets. Pawel Majewski, the president of the board at PGNiG, said the acquisition would provide a boost to Polish energy security.

“Starting from 2022, gas from the Norwegian fields will be transported to Poland through the Baltic Pipe,” he stated. “This will result in a greater diversification of the sources of gas imports, which is a guarantee of uninterrupted supplies of the fuel whose role in Poland’s economy is constantly growing.”

Baltic Pipe is expected to enter into service in 2022, supplying up to 10bn m3/year of gas from offshore Norway to the Danish and Polish markets. The pipeline will help Poland reduce its reliance on the Russian gas, which the government views as a national priority.

The Ineos licences hold about 117mn barrels of oil equivalent and will boost PGNiG's Norwegian output by about 55%, the Polish company said. By 2027, PGNiG expects to be producing 4bn m3/year of gas. Norway, the third biggest gas exporter after Russia and Qatar, lifted an estimated 321mn m3/day of gas in February (equivalent to 117bn m3 in a year), according to the Norwegian Petroleum Directorate. This was in line with the government's forecast but about 3%  lower than the January level.

Ineos stated that all 52 of its employees in Norway would transfer over to PGNiG’s Norwegian subsidiary under the terms of the deal, which will need the consent of the Norwegian government. Ineos chairman Brian Gilvary said the sale was part of an effort to monetise the company's non-operated assets, particularly its gas portfolio.

Ineos is on an acquisition spree of its own. In January it closed the $5bn takeover of BP's petrochemicals division, and on March 18, it announced reaching a deal to buy the Danish arm of US oil firm Hess for $150mn.

Net profits for PGNiG last year surged some 300% from the 2019 level, on the back of a $1.5bn settlement payment made by Russia's Gazprom for overcharging for gas in the past.