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Poland´s PGNiG will buy all assets on the Norwegian Continental Shelf of the INEOS Group for $615million

INEOS is a global petrochemicals manufacturer, operating 194 sites across 29 countries. It  generates $61 billion annually and employs over 26 000 people

Poland´s PGNiG will buy all assets on the Norwegian Continental Shelf of the INEOS Group for $615million

Oslo, March 26 - Neftegaz.RU. PGNiG Upstream Norway to buy all assets of INEOS E&P Norge, which includes 22 production licences and an interest in the Nyhamna terminal.
Following the transaction, the PGNiG’s annual gas production in Norway is expected to reach 4 billion m3 in 2027.

The hydrocarbon resources to be acquired by PGNiG amount to 117 million boe, and will increase PGNiG's Norwegian resources by approximately 55%.
Acquisition of the assets of INEOS E&P Norge AS will increase equity gas production of PGNiG in Norway by approximately 1,5 billion m3 per year.
This means that in 2027 its total gas output from Norwegian licences may reach 4 billion m3.

The portfolio being acquired also includes an attractive exploration portfolio, including 6 operated licences, providing longer term growth optionality.
Paweł Majewski, President of PGNiG commented:
  • Acquisition of the INEOS E&P Norge assets means a sharp increase in our gas output in Norway, and will ensure considerable gas volumes for the Baltic Pipe
  • Starting from 2022, gas from the Norwegian fields will be transported to Poland through the Baltic Pipe
  • This will result in a greater diversification of the sources of gas imports, which is a guarantee of uninterrupted supplies of the fuel whose role in Poland’s economy is constantly growing
  • For PGNiG, diversification of the gas portfolio means more flexibility and the ability to offer attractive commercial terms to our customers
Majewski stressed that the characteristics of the new fields are well aligned with the PGNiG's Strategy as gas accounts for some 94% of the resources to be acquired.
The key asset in the portfolio is a 14% stake in Ormen Lange, the 2nd largest gas field on the Norwegian Continental Shelf with an expected production life beyond 2045.
Other producing fields in the portfolio are Marulk (30%) and Alve (15%).
PGNiG will also become a co-owner (8.2% interest) of the Nyhamna gas terminal, which serves, among others, the Ormen Lange and Aasta Hansteen fields.

The purchase price agreed between PGNiG and INEOS is $615 million, with January 1st 2021 being the agreed effective date.
The final purchase price will be reduced by the cash flow generated by INEOS in 2021 until the completion of the transaction.
Currently, PGNiG Upstream Norway holds interests:
  • in 36 licences
  • produces oil & gas from 9 fields
  • involved in development of another 6 fields
Last year, PGNiG produced some 0.5 billion m3 of natural gas on the Norwegian Continental Shelf.
The volumes forecast for this year, without accounting for the transaction with INEOS, are 0.9 billion m3.
Growth of the gas output will be made possible by the launch of production from the Ærfugl field, the additional acquisition of interests in producing fields already completed.

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