Polskie Górnictwo Naftowe i Gazownictwo S A : PGNiG Group to expand gas storage capacity by 800 mcm

30.06.2022 PGNiG Group to expand gas storage capacity by 800 mcm

The PGNiG Group will soon undertake a project to expand its Underground Gas Storage Facility (UGSF) in Wierzchowice. The project will add as much as 25% to Poland's overall gas storage capacity, which will reach 4 bcm.

"The project to expand our gas storage site in Wierzchowice will meaningfully improve Poland's energy security. It will add as much as 25 per cent, or 800 mcm, to our existing storage capacity, making us more resilient to crises like the one we are currently struggling with in Europe. By investing in storage infrastructure, we are strengthening the potential of the Polish gas market. This will be a priority goal for the multi-utility group we are building together with PKN ORLEN and Grupa LOTOS," says Iwona Waksmundzka-Olejniczak, the CEO of PGNiG SA.

The investment in the Wierzchowice Underground Gas Storage Facility (UGSF) in Lower Silesia will increase its working capacity from the current 1.3 bcm to 2.1 bcm of gas. Consequently, Wierzchowice will account for nearly a half of the country's overall storage capacity, which will reach 4.03 bcm after the expansion. Hence, one of the key project objectives is to increase the rates of gas injection and withdrawal, which will ensure greater flexibility of the storage site and its ability to accommodate a sudden spike in gas demand. The project will increase the daily injection capacity of the Wierzchowice UGSF by a third, from the current 14.4 mcm to 19.2 mcm. The withdrawal capacity will rise even more, by 66% - from 14.4 mcm to 24 mcm per day.

As part of the project, three new injection and withdrawal wells will be drilled, the gas drying facility will be expanded, and additional gas pumping compressors will be installed. The total cost of the project, scheduled to be completed within 30 months, will be just over PLN 385m.

"Given the construction time and cost, gas storage infrastructure needs a long-term strategy. PGNiG has such a strategy in place, and has been consistent in its implementation. Over the past decade, we have increased the domestic storage capacity by 1.5 bcm, which is almost 100 per cent. Last year, we completed the construction of cluster B at the Kosakowo cavern facility,"notes Iwona Waksmundzka-Olejniczak. "However, in order for these investments to bring tangible benefits in terms of supply security, adequate gas stocks must be built up. So we are equally determined to fill our storage sites to capacity ahead of the heating season. This year, mindful of the geopolitical turmoil, we commenced the injection process earlier and today the storage facilities are almost full," says the CEO of PGNiG SA.

In Poland the underground gas storage facilities are owned by PGNiG and managed operationally by Gas Storage Poland sp. z o.o., a PGNiG Group company which has the status of the storage system operator and, as prescribed by applicable regulations, offers third party access on equal contractual terms.

"The expansion of the storage facility in Wierzchowice is a vital project for the gas fuel market, where strong demand is present. Its increased storage capacity and operational performance will enable better balancing of the system, improving the security of supply also for the growing sector of gas-fired power generation," explains Beata Wittmann, the CEO of Gas Storage Poland sp. o.o., the Storage System Operator.

Wierzchowice is an underground storage facility where gas is injected into a depleted reservoir. Discovered in 1971, the reservoir was on production for 23 years. In 1995, the depleted formation was converted into a storage site, initially capable of holding 0.6 bcm of gas. The former producer wells were used for injection and withdrawal. In the following years, the storage capacity of the site was steadily expanded.

Currently, PGNiG has a total of five storage facilities in depleted gas reservoirs and two storage facilities in salt caverns, where gas is stored in void spaces (caverns) formed within salt deposits in the process of leaching. Cavern storage facilities are characterised by high injection and withdrawal rates.