Warsaw, 16 October 2012

1. TNCMarket Participant's Questions Warsaw, 16 October 2012 the system,that connects

2. GENERAL PRINCIPLES

3. Will the Yamal system be treated as an integral part of the system? What does a Virtual Point and imbalacing, for instance, look like in this case? The Transit Gas Pipeline System is not treated as an integral part of the national transmission system. It is governed by a different transmission network code and we do not expect these principles to change in the nearest future. The virtual point is a point in the national transmission system, in the TGPS at the moment there are no such solutions being implemented at present. The balancing principles have been described in detail in the TNC which governs the Polish section of the Yamal - Europe Transit Gas Pipeline System.

4. Will high-methane natural be the object of "trade" at the Virtual Point and of commercial balancing - when will this happen and on what principles? Due to the lack of balancing possibilities and the specific nature of a high-methane gas system we do not foresee introducing trading with this gas in the nearest future at the Virtual Point.

5. Are the entry points on the border with Belarus and the Ukraine also exit points? What are the plans and works schedule as well as the conditions for such a project? Exit points at the Poland-Ukraine interconnector has already been started-up – this is the Hermanowice point in the direction of Ukraine ID 402402 with a capacity of 200,000 m3/h. We are unaware of any interest in the performance of such services at the Poland-Belarus interconnector.

6. How are the Gas Reference Prices calculates and how does it relate to the market prices? A detailed description of the method of calculating the GRP has been outlined in the TNC in point 19.3.6.1. It is calculated pursuant to the costs of purchase of the gaseous fuel by the TSO. The Operator is planning to purchase the gaseous fuel on alternative principles n the future than are binding at the moment and therefore it is expected that the GRP will be directly dependent on the market price of gas. The GRP is subject to change in every gas day.

7. NEW CONTRACT MODEL

8. What will the change of seller procedure look like exactly? How are the exact principles shaped in terms of the manner of "transferring" capacity / contracted capacity, ownership of capacity / contracted capacity: seller or buyer, complex contract versus separate contracts, a partial change in seller? The procedure for changing the seller has been described in detail in point 11 of the TNC. We do allow a partial change in seller.

9. What are the capacity "contracting" by sellers / network users at interconnectors of the TSO / DSO? At the interconnectors, contracted capacity, capacity is purchased by the DSO of the SSO. The entity ordering the transmission service to the distribution network "contracts" the capacity at the Virtual Entry Point to the distribution zone (WPWYDSO). The capacity at WPWYDSO is free of charge. Each applicant will be able to receive capacity equal to the amount of the ordered capacity by the given distribution system operator. This value will be published on the website of the TSO.

10. Are there any fees for using the Virtual Point and if so what are they? No specific fees have been foreseen for the Virtual Point. Fees for the awarded capacity have also been abandoned.

11. What discounts are envisaged and who is responsible for losses resulting from the transmission of gas that does not meet the required standards and what will they be like in relation to the the gas that is supplied to the transmission system and dispatched by the TSO at the physical exit point? In the TNC, point 20.26 there is a detailed description of the discounts that are available for the System Users in the event of gas being transmitted by the TSO to the physical entry point that does not meet the quality requirements specified in the TNC. The TSO charges a fee from the Network User (Shipper) for the gaseous fuel introduced at the FPWE to the transmission system. Whereas, at the FPWY to the distribution zone the settlement, namely, a discount will be granted by the DSO. As for the FPWY to the final customers in the transmission or distribution network respectively, the TSO or DSO will grant any discounts to the Network Users / Shippers / Distribution Shipper.

12. Is the distribution area the same as a distribution zone? The distribution area signifies the area where the DSO operates by distributing the gaseous fuel to over 500,000 customer, encompassing all the MFPWYDSO and MFPWEDSO of a given DSP divided into E and Lw gas. The distribution zone, however, as defined in the TNC of the Polish Oil and Gas Company Capital Group signifies the hydraulic connection of the distribution networks.

13. What are the nomination / allocation principles at WE/WY points with the Gas Exchange and OTC, also in relation to given TNCs? Nominations at the OTC point will be submitted according to the same principles as are applicable to the remaining points. For the WPWEgg and WPWYgg, nominations on behalf of the Customers will be submitted by the Gas Exchange. Allocation concerns both points and because they are virtual points the allocation for them will be tantamount to nomination.

14. What procedure will be implemented to incorporate new points (for periods longer than a year) during the course of the gas year? The TNC has not directly foreseen such a procedure: a) does this mean that this will not be possible, namely, that complex contracts with customers, the start-up of mines should start on 1 October if such a possibility exists (but not within the "annual time windows"), b) will it be possible to settle this new point on a long-term service basis? Pursuant to point 7.5.3 – the conclusions and remarks submitted after the deadline specified for the procedure will be examined once the comments and remarks that were submitted within the designated time frame by the Code will be reviewed. The start-up of mines or complex contracts with customers will not have to start on 1 October. The new point introduced to the CCA/CA during the course of the gas year will be settled on the principles of a long-term service if the order will concern an annual or longer than yearly period.

15. ONE DAY SERVICE Is the application submitted by the Network User for contracted capacity allocation (CCA) or capacity allocation (CA), mentioned in point 9.3 of the TNC only serve to calculate the financial security, or does it also determine the upper limits (CCA and CA) of the nomination of the Network User for given gas days? Yes, this value only serves to calculate the financial security. ONE DAY SERVICE Are the CCA or CA allocated to the customers at the customer's request binding for the TSO and the Network User (point 9.3) Yes, in terms of the financial security; no, in terms of the allocation of CCA/CA in the nomination approval process. ONE DAY SERVICE Is the allocation of CCA for a one day firm service mean that this "part" of the CCA cannot be offered to another system user within a long-term contract? No, the one day service does not have priority over a long-term contract.

16. ONE DAY SERVICE Will the allocated capacity in the one day service be restricted by a maximum value (if so, what value)? On the allocation stage there won't be. There will be on the stage of verifying the nominations – each time dependent on the situation – the quantities of the nominated for a given point by the remaining customers. ONE DAY SERVICE Is the qualification of a one day service as a firm or interruptible service occur at the time of acceptance by the TSO of the CCA and the CA application, or in the moment of approval of nominations for a given day? The qualification of a one day service occurs on the stage of approving nomination for a given gas day.

17. ONE DAY SERVICE Is it possible that a service can be performed for the same point within the same framework contract and for different days on firm or interruptible principles? Yes, such a situation may arise. This depends on the contracts of the remaining customers using the given product. ONE DAY SERVICE Can the size of the allocated firm capacity + the interruptible capacity + the one day capacity exceed the technical capacity? Yes, such a situation may arise. This depends on the contracts and nominations of the remaining customers using the given product.

18. What will the procedure be like for a Shipper (Network User) (Shipper, SSO, Investor)  to order capacity allocation (CA) and contracted capacity allocation CCA in storage facilities that are under construction or newly built gas storage facilities? This question should be directed to the SSO. From the side of the TSO, CCA or CA will be made available that encompasses the entire storage facility.

19. The TNC regulates issues connected with the "hierarchy"of capacity allocation applications for firm services according the the criteria of the term for which the service is being ordered, e.g.  point7.4.10 ( 7.4.10 Firm Capacity Allocation at physical points other than those specified in point 7.4.7.2 takes place in the following order: capacity for annual periods, semi-annual, quarterly, monthly and for one gas day ." What principles/criteria are in force in terms of the performance of contracts:-       firm capacity (e.g. a question of who introduced restrictions first caused by works on the system or other reasons);-        interruptible capacity. Is this a "service period" criterion (annual - semi-annual - quarterly- monthly - one gas day) , a date of contracts conclusion criterion or some other? In what order will the capacities be "made available” within one Shipper - firm, interruptible, firm daily, interruptible daily  or firm, firm daily, interruptible, interruptible daily? • Firm services just like the manner described in point 7.4.10;interruptible services are reduced pursuant to the level of reliability of gas supplies starting from level 4. • All the interruptible contracts on the same level are interrupted proportionally irrespective of the duration of the contract. • The services will be started up in the following order: firm; interruptible; daily (if there are unreserved transmission capacity available at the point it shall be qualified as a firm one day service – otherwise, as interruptible).

20. What are the principles for performing the capacity allocation procedure at an interconnector? What will the bundled capacity allocation procedure look like, both in terms of the procedures (schedules, on which stage of the system is the System User; will there be any rights and obligations that will rest on the System User and interoperating system operator and if so what will they be)? • Capacity allocation at interconnectors shall take place under auction. • Bundled capacity will be made available at the Lasów point under a common auction of the ONTRAS and GAZ-SYSTEM S.A. operators.

21. Was it the intention of the TSO to differentiate the terms "refusal to accept a contracted capacity allocation application"  (point 7.6.9) and  "rejection of the contracted capacity allocation application (CCA) or refusal of contracted capacity allocation (CCA)" (point 7.6.11);If the differentiation of these terms is intentional, what is the term used to inform the Applicant that the contracted capacity allocation application was refused?Why does the TSO not inform the President of the ERO of the "refusal to accept the contracted capacity allocation procedure"? -       • Yes, this differentiation was intentional. • Rejection of a contracted capacity allocation application – point 7.1.6 • Refusal to accept the application – point 7.6.9 • Refusal to allocate the capacity – point 7.6.8 • Pursuant to point 7.6.11 in the event of a rejection of a contracted capacity allocation application (CCA) or refusal to allocate contracted capacity (CCA), the TSO immediately informs the interested entity in writing as well as the President of the ERO, stating the grounds thereof. • In this context a refusal to accept an application should be treated simply as a refusal in the broad sense of the word, therefore, the TSO will immediately inform the applicant of the refusal to accept the application.

22. Was it the intention of the TSO to differentiate between the pressure concepts? In point 3.7.4.2 there is mention of the  "scope of pressures specified pursuant to point 3.4.14", whereas in point 3.4.14, there is mention of "pressure." No, this will be unified during the process of updating the Code.

23. When does one receive the status of Shipper? The TNC assumes that there are many unexplained reasons for obtaining the status of a Shipper: -  Pursuant to point 8.1.1 of the TNC    "... in the moment of obtaining the contracted capacity allocation the  System User obtains the status of Shipper... -  at the same time, pursuant to point 8.1.11 the "System User to whom contracted capacity was allocated (CCA) at the physical entry or exit points (FPWE and FPWY), with the exception of DSO and SSO, shall obtain the status of Shipper." Everyone receives the status of Shipper in the moment they are allocated CA or CCA/CA.

24. Can the capacity allocation application be submitted at any time? Yes, this stems from the principles outlined in point 8.2 of the TNC.

25. What are the reasons for rejecting a capacity allocation (CA) application?  Point 8.2. does not contain a list of reasons for rejecting applications. Please provide all the points in the TNC containing the reasons justifying the rejection of an application by the TSO. The rejection of a capacity allocation application may take place for the following reasons: - non-compliance with point 8.1.15 - failure to present the contract with the DSO - exceeding the value of the capacity specified in points 8.1.5; 8.1.6; 8.1.8; 8.1.9 – capacity at connections with the DSO and SSO published on the website of the operator - non-compliance with point 8.1.20 – exceeding a term of 4 years - non-compliance with point 8.1.19. – lack of confirmation from the SSO

26. Can a System User apply only for the aggregate contracted capacities together based on a transmission contract (point 4.5 TNC)? If so, why? Point 6.4.5 of the TNC states that a transmission contract (framework) without CCA or CA does not give any right to use the system. To use the transmission system, trade on the exchange, submit nominations, it is necessary to obtain CCA or and CA. A System User can apply for the following: - CCA (DSO; SSO) - CA (DSO; SSO, Shipper) - CCA/CA(Shipper).

27. Can a Shipper make a request to the TSO to suspend gaseous fuel transmissions to an exit point where a Shipper Customer collects gaseous fuel only if the Shipper Customer is in default for gaseous fuel payments in relation to the Shipper (point 10.3 TNC)? Will this also be possible when there are outstanding payment for the performed transmission services? (which would be consistent with Art. 6 item 3a of the Energy Law Act). If the Customer has outstanding payments for the gaseous fuel for at least a month after the term of payment then, despite giving prior notice of termination in writing of the intent to terminate the agreement and the designation of an additional, two-week term to pay the outstanding payments , pursuant to Art. 6 item 3a of the Energy Law Act it will be possible to interrupt the gas supply. However, if several Shippers use the given physical exit point to the Customer, the application for a suspension in the transmission of gaseous fuel to the given Customer - exit point, the application has to be submitted by all the Shippers (point 10.4 TNC).

28. Capacity Allocation (CA) Can the amount of CA of the customer allocated to its suppliers (shippers) exceed the CCA of the customer? A Customer with several suppliers does not have capacity allocated for the entire point from where they collect the gaseous fuel. Each of their suppliers has CCA/CA, if they are not a supplier towards themself, then they also have CCA/CA allocated. The CCA/CA allocation decision at a given exit point to the final customer is undertaken by the final customer.

29. What are the rules for settlements (discounts) between the Shipper and the TSO when the TSO will supply gaseous fuel to a distribution area that does not meet the quality parameters specified in the TNC? (please specify the TNC point) In that case the discount will be granted to the System User (DSO), settlements on this account between the TSO and the Shipper are not foreseen. At the physical gas off-take point in the network of the DSO, the Shipper will receive a discount from the DSO.

30. How often and in what way will the correctness of designating settlement areas be verified (re. Gross Calorific Value)? Please specify the point in the TNC Everyone has the right to submit reservations concerning the correctness of area designations as well as the correctness of results and then control measurements can be taken with the use of an accredited laboratory. This may, for instance be the laboratory of GAZ-SYSTEM S.A. in Pogórska Wola or the CLPB of the Polish Oil and Gas Company. The results (Gross Calorific Value) provided by the TSO for given areas should not, pursuant to the Regulation of the Minister of Economy on detailed conditions of gas system operations of 2 July 2010, deviate more than +- 3% from the results of the control check. If they will be within 3%, the cost of the control tests will be incurred by the person that submitted their reservations. If the difference will be greater than 3% then more control measurements will be taken at the cost of the TSO and the area will be appropriately changed.

31. BALANCING PRINCIPLES

32. m3 versuskWh/MWh: Why is such a complicated system (kWh/MWh) used for the gas quantities? When will the kWh/MWh without any algorithms be truly implemented? The algorithm used for conversions results from the lack of consent from the ERO for transmission tariffs to be provided in energy units. We expect that a new Tariff Regulation will be adopted which will allow us to greatly simplify the settlement mechanism in the scope of energy units.

33. Why are there restrictions on the 5%level for daily re-nominations? The restriction concerns hourly re-nominations and not daily ones which is why it is not so restrictive. They were introduced for technical reasons and they only concern selected points.

34. Commercial balancing: what are the settlement principles, the parties to the settlement, balancing on the level of the TSO versus balancing on the DSO level? The balancing principles have been described in detail in point 19 TNC. On the TSO level, the parties to the balancing are the Shipper and the TSO . Pursuant to the principles specified in the draft TSO, balancing in E gas distribution areas on the DSO level are not foreseen.

35. What are the deadlines for submitting the reports and Commercial Transmission Reports? The settlement data, pursuant to point 21.4.6 will be made available to the Shipper by 28 day of the next month.

36. What will the principles be like for corrections of the settlement values (energy) in the event of a difference greater than +/- 3% in gross calorific value at a given physical point in a settlement area? (please specify the TNC point) We do not envisage such discrepancies arising. Nevertheless, should such an event occur, the complaint procedures foreseen in point 3.4.12. will be applicable.

37. What will the procedure for nominations of one day services be like?:a) Will the TSO approve applications for a one day service if the nominated quantity will exceed the allocated firm CA?b) How will the TSO inform the Shipper of it not receiving approval to use the one day service? The application of the procedures for completely rejecting nominations/re-nominations will have a negative impact on other Shippers under firm CA.c) How will the service be incorporated in the CTR?d) Is it possible to re-nominate a nomination that was approved and which submitted a day in advance for a one day service in the current day? • In order to use the one day service, the Shipper must have notified in the CA his intent to use a one day service at a given point . Then,when submitting nominations in larger quantities than the CA for long-term, semi-annual, quarterly and monthly services, it is understood that nominations were submitted to obtain a one day service. The nomination will be accepted to be performed from: • the firm capacity allocation in the scope of available technical capacity at that point or • contracted capacity above the available technical capacity. • In such a case, the nomination will be reduced or rejected. • In the CTR one day services have not been foreseen to be singled out – the total nomination and the performance for a given day. • One day services can be re-nominated during the day.

38. In what order will the reductions be performed in the case of restrictions in capacity arising and quantities nominated by the Shipper for the firm, interruptible capacity and the one day service? Neither the duration of the contract nor the type of service - long-term, short-term or daily is important in the case of reductions. Interruptible services are first subject to restriction, starting from level 4 to level 1. Firms services are reduced after that, proportionally to the nominations.

39. Will the TSO reject single points that have incorrect nominations or whole nominations submitted by the Shipper? Incorrect nomination/re-nomination from one of the Shippers may have a negative impact for other customers, other Shippers (impact on available interruptible capacity), Shipper balance (adoption of zero values for nominations), and consequently for balancing the transmission system.. Pursuant to edig@s standards, the entire nomination will be rejected.

40. Pursuant to the TNC, the Shipper is required to take statutory restrictions into consideration in the submitted nominations. How does the TSO intend to control the adaptation of customers to the introduced restriction levels and the nomination process in this scope if: -the customer with several suppliers will be able to submit nominations to them that in total will exceed the level of the statutory restriction; -individually in the Shipper nominations the restriction levels will not be exceeded? The issue of submitting nominations by the customer to its suppliers is not regulated in the TNC. The described situation should not take place because the CCA = CA and at the time of restrictions in the quantity, they are reduced pursuant to the restriction implementation plan.

41. Nominations for a Virtual Point – is it necessary to stipulate the contractors of the Shipper? If so, when will the contractor codes be issued? Contractor codes will be issued as the need arises. Apart from the code for the Gas Exchange (for WPWEgg and WPWYgg points) the issue of special codes is not foreseen for the functioning of the remaining Virtual Points. Within the OTC market, every Shipper submits a nomination stating the code of their contractor (second Shipper). In the event of any discrepancies, pursuant to point 15.2.11 TNC, the "smaller stream" principle is applied.

42. Pursuant to the TNC, there is a possibility of submitting re-nominations in the present gas day at any time, but the re-nominations are reviewed every full hour. Therefore: • after submitting the re-nomination in the present gas day at, for instance, 1.50 pm, when will it be possible to submit the next re-nomination, considering the time necessary to review the re-nomination, which amounts to 2 hours? • Will it be possible to submit the next re-nomination at 2.30 pm (reviewed at 15.00) ? • How should one take into consideration (nominate) the quantities nominated in the previous nomination, i.e. the one that is currently being reviewed? • There are no limits in terms of the number and frequency of submitted re-nominations. If the Shipper will make more than one re-nomination from the last time it was checked until the full hour, then only the last re-nomination received will be examined. • It will be possible; the re-nomination submitted at 2.30 pm will start to be implemented from 5:00 pm. • The values from the examined re-nomination should be stated.

43. What circumstances can arise in the transmission system that would cause a rejection of a nomination/re-nomination caused by lack of technical capacity to perform the nomination? An emergency situation, a restriction in neighbouring systems (SSO, ISO, DSO).

44. Can the customer making the gaseous fuel quantity allocations change the allocated operative quantities featured in the settlement report? Will the contracts concluded with the customers contain premises specifying the circumstances in which the customer can perform a settlement allocation different to the operative one? Will contracts will all customers be signed and become effective by the date of enforcement of the entire TNC (v 18)? Yes, the customer may change the operative quantities in the allocation. The quantities from the settlement allocation have to be consistent with the settlement measurement. No, this is the decision of the customer. Wherever required, the TSO has signed contracts with customers. The TSO will sign new contracts when necessary.

45. Are the Shipper, DSO and SSO also customers? How should the above be treated in the context of, for instance, the allocation obligation that the customer (Shipper?) is to perform pursuant to point 16.2.1.   Yes, pursuant to the definition of a "customer", the Shipper, DSO and SSO are also customers. In point 16. TNC, the entities that are required to perform allocation have been listed. In the case of the final customer, it is performed by this customer.

46. Will the TSO inform the Shipper of any changes in the pressure parameters set for points which are published on the website as well as the HS designated to convert the contracted capacity? In September 2012, the HS for converting the contracted capacity was changed for the entry points in Cieszyn and the reverse Cieszyn point, about which the Shipper was not informed. Please explain why. No, the TSO publishes the Gross Calorific Value, this is available on an ongoing basis on the website of the operator and the Shipper has the possibility of monitoring these values.

47. The balancing service market - will a fee be charged pursuant to point 18.3.3. if an offer is made for the supply of gas from an entry point from an eastern direction, the TSO accepts this offer, and appropriate nominations will be made ? (for the unperformed part of the system services) if at the entry point the pressure will drop which will make it impossible for the declared quantities to be performed? The performance of the offer that was accepted by Gaz-System S.A. under the Balancing Services Market is submission and approval of nominations by the TSO. The nomination accepted by Gaz-System S.A. constitutes the performance of the contract for sale of gas. Whereas, pursuant to point 18.3.2 TNC, if, for reasons lying on the side of the Shipper like, for instance, lack of gas (failure to submit nomination) in the cooperating system, the nomination will be rejected, the Shipper will pay a penalty for failing to perform his offer.

48. Thank you for your attention. the system that connects