Polskie Górnictwo Naftowe i Gazownictwo SA has terminated its agreement with the consortium carrying out the construction work at the Wierzchowice Underground Gas Storage Facility, citing non-performance and defective performance of the agreement in conflict with its provisions as the grounds for the termination.
In addition, the work on the project was delayed by 30 business days and the consortium failed to remove the default even after it had been given an extended, adequate deadline to do so.

The project was executed by a consortium comprising PBG S.A. w upadłości układowej (in company voluntary arrangement), TECNIMONT S.p.A. SOCIETE FRANCAISE D'ETUDES ET DE REALISATIONS D'EQUIPEMENTS GAZIERS SOFREGAZ, PLYNOSTAV PARDUBICE HOLDING A.S. and PLYNOSTAV - REGULACE PLYNU A.S. in organisational bankruptcy.

PGNiG called on the consortium to pay contractual penalties of PLN 133.4m, payable to PGNiG within 14 days of the receipt of the notice.

The progress of work on expanding the Wierzchowice Underground Gas Storage Facility is 97%. PGNiG intends to complete it using PGNiG Group resources. The project is scheduled for completion by the end of 2014.

To note, the facility has reached and maintains the intended storage capacity of 1.2bn m2.

About PGNIG

The PGNiG Group is the leader of the Polish natural gas market, as well as the only vertically integrated gas company in Poland. Its parent undertaking is Polskie Górnictwo Naftowe i Gazownictwo. Formation of the Group's enabled coordination of the upstream and downstream operations - from exploration and production to storage to trade and distribution of gaseous fuels. The roots of the companies forming PGNiG date back to 19th century - to the beginnings of Polish and world oil industry. The company has been operating under the name PGNiG since 1982. In 1996, the state-owned company PGNiG was transformed into a joint stock company.