Poland's PGNiG, PKN Orlen Make Gas Power Pact

Polish gas company PGNiG and the country's top oil refiner PKN Orlen have signed a letter of intent on developing a gas-fired power station and a network for biogas production, they said on September 3.

The pair aim to draft binding co-operation agreements on the projects by October 30, although the two hope to become one national company some time in early 2022. The 750-MW combined-cycle gas turbine station is expected to be built by 2024 in Ostroleka in northeastern Poland, replacing earlier plans for a 1-GW coal-fired plant. PKN Orlen's decision to drop that project in favour of a gas-based one comes as Poland shifts its energy policy away from coal, which currently provides 80% of the country's electricity.

Meanwhile, their plans for biogas cover the acquisition and expansion of pilot production projects, with the aim of creating a nationwide plant network by the end of 2025.

PKN Orlen has reached a preliminary deal to acquire PGNiG as part of government plans to merge the country's biggest energy groups. It has also taken over Polish energy utility Energa and is working to close the acquisition of another Polish refiner Lotos. It has had to sell off assets in order to satisfy the European Union's competition directorate.