Energy alliance

Energa, Polish Oil and Gas (PGNiG) and Grupa Lotos, three of the largest energy firms in Poland, have signed a letter of intent concerning a natural-gas-fired power plant in Gdańsk.

The agreement between the three parties envisages the construction of a 100-150 MW power plant. The total cost of the investment could reach €300 (zł.1,085) million, daily Parkiet estimated.

"We don't know the details yet, like how big the capacity will be or how much will it cost," Lotos spokesperson Marcin Zachowicz told Reuters. He added that the majority of the project's costs would be borne by Energa.

In line with the agreement, Energa will organize the construction, PGNiG will supply gas and Lotos will be the main energy buyer. According to Parkiet's unofficial sources, the energy concerns hope to bring the plant online in 2011.

PGNiG, Poland's natural gas monopolist, saw a drop in natural gas sales last year compared with 2006. The company wants to increase sales volume by investing in new markets. Energa, meanwhile, hopes that the new power plant will help it to balance the energy needs of Gdańsk with the rest of the Pomorze region.

"Other recipients in the Pomorze region will benefit from the electric and heat energy generated from the plant," the firm said in a press release.

For its part, Lotos is investing to increase capacity. "As part of [Lotos'] 10+ program, we will see a rise in demand for electrical energy and process steam. This demand will rise even further after the end of the investment program in 2010," Grupa Lotos CEO Paweł Olechnowicz said in a statement.

The 10+ program is Lotos' strategic investment plan to achieve a more than 10 percent share of the fuel retail market and an oil throughput capacity of more than 10 million tonnes per annum, as well as to increase the company's value to over zł.10 billion.