LMG, Poland's Largest Oil and Gas Extraction Facility, Starts Production

March 27, 2013

Polskie Górnictwo Naftowe i Gazownictwo SA (PGNiG) began production at the Lubiatów-Międzychód-Grotów facility (LMG), one of the largest and most advanced projects completed by the Company in recent years. The project will increase Poland's conventional oil and gas production.

Development of the LMG fields is an important step towards expanding PGNiG SA's oil and gas production and enhancing national energy security. The LMG fields are among the largest in Poland. Their recoverable reserves amount to around 7.25 million tonnes of crude oil and approximately 7.3 billion cubic metres of natural gas.

The fields were developed to produce oil and gas from 14 wells. The project, with a value of PLN 1.7bn (VAT inclusive), was delivered by a consortium comprising PBG SA, Tecnimont KT S.p.a., and Thermodesign engineering Ltd.

The commissioning process began in mid-October 2012, and in February of this year the facility was producing one thousand tonnes a day. On March 22nd 2013, the parties signed the Final Acceptance Certificate, which attests that all structures have been built in accordance with the EPC contract, 20 days ahead of the agreed completion deadline and within the agreed budget. In its initial period, the facility's annual production will amount to some 100 million cubic metres of natural gas and 300,000 tonnes of crude oil.

With the LMG facility and the Norwegian Scarv field on stream, the Company's oil production will double from the current level of approximately 500,000 tonnes to about 1.1 million tonnes a year.

The LMG facility complies with all legal requirements, including environmental laws. Many of the technologies and control systems used in the project largely exceed the legal requirements. These include a high-efficiency gas desulphurisation system, automated transmission pipeline leak detection system, air monitoring system, and an enclosed combustion chamber flare system.

As part of the project, wells were completed into oil and gas reservoirs, and associated infrastructure was built, including ancillary systems, a pipeline system connecting wells to the LMG Central Control Station, and a pipeline system linking the facility to the Wierzbno terminal.

SOURCE: PGNiG Press Office