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UPDATE 2-Poland's PGNiG expects Norway field to help boost gas output by 12 pct in 2013
March 19, 2013 / 7:41 AM / in 5 years

UPDATE 2-Poland's PGNiG expects Norway field to help boost gas output by 12 pct in 2013

* PGNiG expects 2013 output to rise to 4.8 bln cubic metres

* Q4 net profit $687 mln, below expectations

* Boosted by Gazprom deal, but not as much as expected

By Agnieszka Barteczko

WARSAW, Mar 19 (Reuters) - Polish gas monopoly PGNiG said the start of production at the Skarv field off Norway should help boost its gas output by 12 percent this year, reducing Poland’s reliance on Russian energy imports.

Production at Skarv, a big project by North Sea standards with an expected life of 25 years, started in January. PGNiG owns 12 percent of the project, its biggest in Norway and part of a drive by Poland to diversify its energy resources.

PGNiG disappointed on Tuesday with a fourth-quarter net profit of 2.2 billion zlotys ($687 million), showing a smaller-than-expected boost from an agreement with Russia’s Gazprom that allows it to import Russian gas at a lower price.

Analysts had forecast a net profit of 2.4 billion zlotys, versus 431 million in the fourth quarter of 2011.

“The difference concerns the size of the retroactive bonus from Gazprom. I assumed that it would be significantly higher,” Lukasz Prokopiuk, an analyst at DM IDM said.

He forecast full-year net profit would rise to 3 billion zlotys in 2013, from 2.24 billion in 2012.

PGNiG and Gazprom agreed in November that PGNiG would pay less for gas imports from Russia, which supplies most of the natural gas that Poland burns each year.

PGNiG said that thanks to the Gazprom deal, which had a retroactive effect, its fourth-quarter earnings before interest, tax, depreciation and amortisation (EBITDA) increased by about 3 billion zlotys.

The group’s shares have rallied 47 percent since the deal was announced to record highs, but were down 0.3 percent by 1105 GMT on Tuesday. They still outperformed Warsaw’s blue chip WIG20 index, which was down 1 percent.

PGNiG is also probing shale gas prospects on the Baltic Sea coast, as Poland is counting on untapped shale gas reserves to help it become less dependent on Russia.

Poor drilling results so far and a lack of detailed legal regulation, however, have caused some doubts about Poland’s true shale gas potential.

PGNiG forecast gas output will rise to 4.8 billion cubic metres this year, and 0.3 bcm of that will come from Norway.

In 2012 it sold 14.9 bcm of gas, 4.3 bcm of which came from its own production while the rest was imported from Russia.

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