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Gas Market Knowledge
POLISH GAS MARKET STRUCTURE

The structure of the gas market is still highly monopolized. This is due to dominance in the market PGNiG Capital Group -, which directly or through its subsidiaries conducts all the aforementioned activities, covering 98% of the market. The Polish gas market is practically the market of one seller. In the absence of competition, prices on the market are subject to tariffs and approval by the President of the Energy Regulatory Office (URE).
On July 1, 2007, the PGNiG Group organized the legal and technical separation of its activities, i.e. separation of the technical transfer of gas from its sale. This is the result of the implementation of the provisions of the Energy Law. As a result of commercial separation of customer service, Gas Companies are currently dealing with the technical distribution of gas, acting as the Distribution System Operators (DSO). The Gas Trading Divisions (Dolnośląski, Karpacki, Wielkopolska, Pomorski, Górnośląski and Mazowiecki) constitute a separate organizational structure of PGNiG, which operates 23 gasworks and over 300 Customer Service Offices throughout the country.

 

Liberalization of the natural gas market

 

Creation of a single, virtual gas purchase point in Poland by Gaz-System, and the launch of gas sales at the Polish Power Exchange have created a basis for its liberalization. Another important change was the introduction of a statutory bond and the subsequent division of PGNiG into two companies. As a result, liquidity on the stock market has increased significantly, and for all gas trading companies in Poland comparable conditions have been created for the purchase of natural gas.

 

More information on the divisi on of gas market

 

Division of gas market
MARKET FORMS

Basic forms of activity of market participants:

 

  • Bilateral contract market,
  • The market of the next trading day (SPOT transactions) and property rights market (certificates compliant with the law);
  • Balancing market, which is operated by the Transmission System Operator.
MARKET PARTICIPANTS

There are entities operating in the current gas market:

 

  • Transmission (Transmission System Operator)
  • Distribution (Distribution System Operator)
  • Trade,
  • Storage,
  • Exploration and mining.

 

More information on market participants

 

PSG S.A. GAZ System S.A. TGE S.A. PGNiG S.A
TRANSMISSION SYSTEM OPERATOR

Transmission Network Operator (OSP) is owned by Gaz-System S.A., whose mission is to transport gas through high pressure networks. The Company operates a network of transmission pipelines of approximately 9853 km in length, gas depots and reduction and measurement stations.

DISTRIBUTION SYSTEM OPERATORS

There is one distribution operator operating in the distribution area - PSG Sp. z o.o., and dozens of smaller distribution system operators operating locally, whose networks are connected to PSG Sp. z o.o. or the transmission system operator Gaz-System S.A. The distribution of gas to customers is done in accordance with the requirements specified in the Distribution Network Operating Instructions.

TRADE

The trading area is occupied by several dozen entities, but as in the case of distribution, it is monopolized by one large entity - PGNiG S.A. At the end of December 2014, 141 entities had a license to trade in natural gas. On the other hand, 59 companies were active in the field of natural gas trading.
The majority of the gas sold to the final customers on the Polish market belongs to PGNiG S.A. The remaining part of gas sales to final customers is carried out by alternative trading companies operating in Poland and by companies selling gas from abroad directly to large final customers who themselves have imported this gas to Poland.

Natural gas exchange
The sale and purchase of gaseous fuels on the Polish wholesale market takes place primarily on the commodity exchange run by Polish Power Exchange SA. (TGE). Participants of the stock market are mainly gas trading companies and large final customers who can act on their own after entering into a relevant agreement with TGE S.A., becoming members of the exchange or through brokerage houses. Exchange trading takes place through the conclusion of sales agreements (transactions) between members of the exchange.
The development of the stock market of natural gas is, among others, a result of changes in the Energy Law, which obliged energy companies involved in the sale of gaseous fuels to obligatory sale of part of natural gas on commodity exchanges.

EXTRACTION

In Poland, natural gas is mined mainly in Podkarpackie and Pre-Carpathian basins as well as a result of the methane de-mining of coal mines in Upper Silesian Industrial District.
Apart from traditional methods, in Poland there are also unconventional possibilities of obtaining natural gas. This could be methane from coal deposits, slate methane and gas extracted from isolated rock pores. Such resources are estimated at 1.5-3 trillion cubic meters.
In 2010 exploration works began, which in the next few years will give the answer whether such deposits exist. Conventional deposits are estimated at 98 billion cubic meters.
Between 2015/2016, domestic production accounted for about a third of the gas demand in Poland. The remaining 2/3 came from imports, mainly from Russia.

STORAGE

The gas storage business in Poland is run by PGNiG, which now has 6 underground gas storage facilities with a total capacity of 1.6 billion cubic meters.

PROCESS OF CHANGE OF GAS PROVIDER

Most of the gas market shares are held by PGNiG. However, every customer connected to the distribution network of the PSG has the right to change the seller of gas fuel to any company that holds the General Distribution Agreement with the OSD that is located in the area of the distributor. In case of the gas market, it is usually one of the companies of the PGNiG Group.

 

Procedure for changing the gas seller


Poland is currently in the process of liberalizing the market for the sale of gaseous fuel in line with the principles of EU free trade and the regulations. Independent gas sellers are present offers for both business customers and for households. A change of gas seller can be done by authorizing a new seller to act on our behalf.
Each customer, having a comprehensive agreement with PGNiG on the sale and distribution of gas, has the right to terminate and change the seller. The change is free of Any charge. It also does not mean gas interruptions or replacement of the system. The OSD is still responsible for the continuity of supply.

 

 

1. Contract with the new seller


2. Termination of the sale contract to the existing seller (this step may be performed by the new seller)

 

3. Conclusion of a distribution agreement (this step can be performed by a new seller)

 

4. Inform the OSD of the conclusion of a new sales contract (this step is performed by the new seller)

 

5. Final settlement with the current reseller

 

 

Changing the seller from the moment of signing the contract usually takes about 3 to 4 weeks. After the old agreement expires, there comes the settlement with the existing seller.
If a customer decides to change the gas supplier, it is easiest to sign the new seller's authorization to act on our behalf. He will inform our OSD about the change of the dealer and will terminate the comprehensive agreement with PGNiG. The seller will also pay a deposit to the OSD, which guarantees gas supply.