Polish explorer PGNiG has teamed up with four other state companies to mount a $510.5 million shale gas exploration campaign in northern Poland.
The gas monopoly’s partners in the venture are copper miner KGHM and Poland’s three largest utilities – PGE, Tauron and Enea.
Representatives of the quintet in Warsaw put pen to paper on the consortium on Tuesday, the explorer announced.
The deal, which had been rumoured in recent months, is thought to be partly as a result of government pressure on companies to intensify shale gas development efforts.
The size of the costs and risks involved have forced the Treasury, which oversees state assets, to seek extra capital outside exploration players PGNiG, PKN Orlen and Lotos.
“We will not achieve success in such a complicated investment process without joining forces,” Treasury Minister Mikolaj Budzanowski said just minutes before the five top executives put their signatures under the deal.
The five have agreed to explore for gas at three locations in PGNiG’s Wejherowo concession – known as Kochanowo, Cz?stkowo and Tepcz – where preliminary research confirmed the presence of shale gas.
A limited partnership is to be formed that will take over the concession, with representatives of all five companies involved in its operating committee, according to the agreement.
The partnership will spud one vertical and around 12 horizontal wells at each of the three prospects, with PGNiG hoping to reach production by 2016.
The five said they would determine how to divide up the costs in the agreed budget as well as project deadlines and other terms within four months of Tuesday’s agreement.
PGNiG said the co-operation could later be extended to other Polish shale licences, of which it holds 14 in all.
The explorer is also in talks with Canada’s Encana over potential co-operation in shale gas exploration in Poland, deputy chief executive Miroslaw Szkaluba told reporters on the sidelines of the signing.
Poland has pegged its recoverable shale gas reserves at 346 billion to 768 billion cubic metres, well below an earlier estimate of 5.3 trillion by the US Energy Information Association.
Last month, Exxon Mobil pulled out of exploration projects because it did not deem them economically viable, increasing pressure on Poland to rely more on state companies to fund the expensive projects.
