Polish state firms announce $517m shale gas exploration deal

04 July 2012 17:53  [Source: ICIS news]

LONDON (ICIS)--PGNiG has signed a zlotych (Zl) 1.72bn ($517m, €409m) shale gas cooperation deal with four other Polish state-controlled companies, the gas monopoly said on Wednesday.

PGNiG will link up with energy utilities Polska Grupa Energetyczna, Tauron Polska Energia and Enea as well as copper producer KGHM Polska Miedz to explore for shale gas in a 62 square mile (160 square kilometre) area of northern Poland, PGNiG added.

The group of companies aims to drill three vertical and about 30 horizontal wells on the area covered by PGNiG's Wejherowo licence.

Hydraulic fracturing, or “fracking”, will be used to explore for shale gas locked in rock formations, the company said.

The Polish government's hopes of replacing a large proportion of imported Russian gas - the country imports around two-thirds of its gas requirements from Russia - with shale gas were hit in late June when Exxon Mobile Corp decided to pull out of its shale gas exploration efforts in Poland because early wells it had drilled did not demonstrate strong gas flow rates.

Analysts at Prague-based investment bank Wood & Company have criticised Polish ministers for resisting commercial policies that would tempt in foreign know-how to help with efforts targeted at exploiting the country's shale gas reserves, estimated as being large enough to supply all Poland's gas requirements for 35 to 60 years by the Polish Geological Institute.

($1 = Zl 3.33, €1 = Zl 4.21)
($1 = €0.79)

By: Will Conroy
+44 20 8652 3214

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