PGNiG : Current Report No. 62/2017

Current Report No. 62/2017

2017.07.27 15:30 Current Report No. 62/2017

Warsaw, July 27, 2017
Conclusion of agreement with KGHM Polska Miedź S.A.
Current Report No. 62/2017
The Management Board of Polskie Górnictwo Naftowe i Gazownictwo S.A. ('PGNiG', the 'Seller') hereby announces that on July 27, 2017 a Framework Agreement for gas fuel supply and bilateral Individual Contracts were concluded with KGHM Polska Miedź S.A. (the 'Customer'), replacing the existing long-term contracts, which were reported by PGNiG in Current Report No. 48/2010 of July 30th 2010.
The Framework Agreement defines the procedures for concluding and terminating Individual Contracts and the rules for placing orders for gas fuel, settling the supplies and renegotiating gas prices. The Framework Agreement also provides for the possibility of changing the type of gas from nitrogen-rich to high-methane.
An Individual Contract is a contract for specific supplies under the Framework Agreement. It is concluded for a definite time and specifies the volumes, price, and detailed commercial terms of gas fuel supplies to a Customer. Under the Individual Contracts, a part of the gas supplies to KGHM Polska Miedź S.A.'s off-take points will commence on July 1st 2017 and the other part on October 1st 2017. In the Framework Agreement and Individual Contracts, supplies of gas fuel to the Customer are guaranteed until October 1st 2033.
Estimated aggregate value of the Framework Agreement together with the Individual Contracts, throughout their duration, is approximately PLN 4.8bn. The pricing formula used in the Individual Contracts was based on market gas price indices.