Overview of the Polish Energy Market & PGNiG Capital Group 6th Stakeholder Group Meeting

1. Overview of the Polish Energy Market & PGNiG Capital Group 6th Stakeholder Group Meeting Gas Regional Initiative – Region South-South East Gdynia, 26th June 2009

2. The Company’s history and key changes on the Polish Energy Market 2007: 1 July – introduction of Third Party Access Rule (as a result of Directive 2003/55/WE being implemented into Polish Energy Law) 2004: Ownership unbundling of the transmission activity – establishment of the PGNiG-Przesył Sp. z o.o. (currently OGP GAZ-SYSTEM S.A.). OWNERSHIP UNBUNDLING 2007: Leagal unbundling of distribution activities – establishment of 6 Distribution System Operators LEGAL UNBUNDLING 2009: Storage Code – published for public consultations 2004 2005 2007 1997 2006 2008 2009 1982 1996 2008: PGNiG appointed as Storage System Operator (31 December 2008). FUNCTIONAL & ACCOUNTING UNBUNDLING 2005: 23 September 2005 - PGNiG on theWarsaw Stock Exchange 1982: PGNiG was established as the State-owned Enterprise PGNiG 2006: Transmission Network Code approved by the Energy Regulatory Office 1996: State-owned Enterprise PGNiG is transformed into a joint-stock company wholly owned by the State Treasury 1997: Establishment of the Energy Regulatory Office 2008: Distribution Network Codes approved by the Energy Regulatory Office

3. PGNiG – Basic information Poland’s leading integrated gas and oil company Robust domestic gas distribution business Leading gas importer to Poland and owner of gas storages Leading gas and growing oil producer Key data * Shareholder’s Structure ** • E&P – domestic production of natural gas (4.1 bcm) and crude oil (496 thousand tones); • International expansion in E&P; • Total sales – 13.9 bcm of natural gas; • Storages – 1.7 bcm of working capacity; • Retail – 6.6 million of end-customers; • Strong financial position;rating BBB+(S&P), Baa1 (Moody’s) • Revenue – 4.4 billion EUR. * Data for 2008 **After shares distribution to employees

4. Overview of PGNiG’s business Business structure • Vertically integrated business; • Leading position in key market segments; • Proven ability to manage regulatory risk across the value chain. Retail Distribution Wholesale Transmission E&P Storage PGNiG Six regional DSO PGNiG PGNiG PGNiG PGNiG Norway POGC Libya Service subsidiaries Branches: Pakistan, Denmark, Egypt, Libya. Functionaland accounting unbundling Ownership unbundling Legal unbundling

5. The PGNiG’s Capital Group value is built on 6 main pillars Key Assumptions of PGNiG’s Group Strategy Transforming the company into a leader of the European fuel – energy market Enlargement of the areas and scale of operations Increase of gas storage capacity The development of commercial activity The development of E&P activities Raise profitability of the gasdistributionactivity Ensuring the supply of natural gas Constant improvement of daily operations

6. 120 +14% +7% +46% 97 90 96 91 91 Less than cm 500 85 85 85 500 cm - 1 000 cm 70 - 7% 1 000 cm - 2 000 cm 60 +16% 58 More than 2 000 cm +178% 50 50 46 43 43 37 30 34 +31% +30% +10% - 9% 21 17 16 14 13 13 13 12 12 11 11 10 9 9 0 Netherlands Germany United Italy France Spain Belgium Poland Hungary CzechRepublik Kingdom 1997 2002 2007e 3 500 - 12% 3 207 3 106 2 800 2 837 2 100 +26% +2% +45% +13% 1 641 1 613 +14% 1 400 1 541 1 494 1 463 1 460 - 8% 1 342 1 306 1 328 1 216 +143% 1 180 +10% 1 191 1 099 1 009 931 915 1 039 700 843 762 723 692 +31% 628 491 359 313 293 273 0 United Italy Hungary Germany Czech Republik Spain France Poland Netherlands Belgium Kingdom 1997 2002 2007e Gas market in Poland (1/2) Gas consumption – Poland vs Europe Gas consumption per capita in 2007 (cm) Gas consumption (bcm/year) (change in the last 10 years in %) Gas consumption per capita (cm/year) (change in the last 10 years in %) • Gas consumption per capita in Poland is very low - only 359 cm in 2007 • Gas consumption per capita in Poland is more than 2 times lower than in Czech Republik and more than 3 times lower than in Hungary

7. Gas market in Poland (2/2) Primary energy balance EU vs Poland Sales of natural gas in Poland – basic information Total gas sales in 2008: 13,9 bcm • Gas share in Primary Energy Sourcesin Poland is much lower than an average in the EU (13% against 24%); • It is a consequence of the extensive usage of coal (hard/brown) as the source of primary energy. UE Poland Source: IEA Natural gas sales by sector – EU (2007) Natural gas sales by sector – Poland (2007) source: EuroGas

8. Gas Supplies and Transport Routes Assumptions for diversification • Gas production: increase gas production from 4,2 bcm to 6,2 bcm; • LNG: 1 million tonnes of LNG secured from Qatar; • Interconnectors: plans (ongoing analysis) to build two or three interconnectors on western and southern borders of Poland in order to extend Polish gas grid connection to EU network; • NW gas: gas supplies from Norwegian Continental Shelf; • SE gas: planned interconnector will reach Baumgarten gas hub and meet Nabucco pipeline; Optimal sources of gas - 2015 Current sources of gas - 2008 Western direction6% LNG and Western direction30% Eastern direction40% Own production28% Eastern direction66% Own production30%

9. LNG deliveries to Poland Basic information – LNG Project Companies responsiblefor LNG terminal construction: TSO Gaz-System/PLNG Location of terminal: Reloading capacity of terminal: LNG tanks capacity: Implementation date: Świnoujście Phase 1 – 2.5 bcm/annually Phase 2 – 5.0 bcm/annually Phase 3 – 7.5 bcm/annually 2 x 160,000 m3 2014 LNG deliveries – PGNiG S.A. • In April 2009 PGNiG and Qatargas Operating Company signed the Head of Agreement in which Qatargas agreed that approx. 1 million tonnes of LNG will be supplied annually to LNG terminal in Świnoujście for a period of 20 years, starting from 2014; • Concurrently PGNiG and Qatargas are conducting talks with a view to entering into a Sales and Purchase Agreement. 9

10. NCS Danish transmission system Skanled Polish coast Niechorze Baltic Pipe Gas supplies from NCS to Central Europe Skanled Project • Main facts: • 5 May 2009 the Skanled Project Group decided to suspend the Skanled project, due to: - increased commercial risk; - withdrawal of majority of Scandinavian companies; - uncertainties related to timing of new field developments on NCS and gas supplies; • June 2009 – OGP Gaz-System decided to suspend the Baltic Pipe project.

11. Current working capacity: 1.6 bcm UGS Kossakowo UGS Daszewo UGS Mogilno UGS Bonikowo UGS Wierzchowice UGS Brzeźnica Existing UGS UGS Swarzów UGS Husów Planned UGS Target working capacity: 3.8 bcm UGS Strachocina UGSexpansion Planned UGS for low-methane gas Expansion of Underground Gas Storage Facilities Basic data 2015+ 2009 • No of storage facilities in 2015 -9 • Target working capacity (bcm)– 3.8 • Estimated CAPEX (PLN bn) – 3.0 • PGNiG SA owns and uses 6 underground gas storage facilities: • 5 UGS in partly depleted natural gas fields: UGS Brzeźnica, UGS Husów, UGS Strachocina, UGS Swarzów and UGS Wierzchowice • 1 UGS in salt cavern: UGS Mogilno. • Working capacity for 2009/2010 (bcm) - 1.6 UGS – construction and development Recent changes • 1 November 2008 – establishment of PGNiG – SSO Branch in Warsaw; • 31 December 2008 – PGNiG appointed for Storage System Operator in Poland; • May 2009 - Market scereening process conducted by the SSO Branch • 16 June 2009 – Tariff for storage services approved by the Energy Regulatory Office; • June 2009 – Storage Code published for public consultations.

12. Development of Oil and Gas Exploration & Production • International expansion of PGNiG started with the acquisition of a stake in E&P concession on Norwegian Continental Shelf (North Sea Skarv, Snadd and Idun fields). • Currently, PGNiG undertakes E&P activities also in the following regions: • Egypt (Bahariya field), • Libya (Murzuq basin), • Pakistan (Kithar concession block), • Southern Denmark. Denmark Norway PGNiG exploration and production activities will concentrate on Norwegian Continental Shelf and in the Maghreb region. Currently, PGNiG plans to engage in new projects in Northern Africa, with Algeria as a potential new country of interest. Tunesia Pakistan Libya Egypt

13. EC Lotos EC Lotos 230 MW 230 MW EC Bydgoszcz EC Bydgoszcz 100 MW 100 MW Other gas fired power projects 1000 MW Pozosta Pozosta ? ? e e gazowe projekty gazowe projekty energetyczne energetyczne 1000 MW 1000 MW EC Stalowa EC Stalowa Wola 400 MW Wola 400 MW EC ZA Tarnów EC ZA Tarn ó w 200 MW 200 MW Prospects for future gas consumption New investments in power sector Natural gas demand Planned capacity ≈ 2000 MW Planned gas demand ≈ 2-2,4 bcm * Ministry of Economy – forecast Gas sales to power plants (2007) • Share of sales to power plants in total gas sales is currently very low in Poland. • In Poland only 7% of gas is sold to power plants, whereas in Hungary 35% (both countries have almost equal total gas sales). • Most probably the situation will change in the future (as a result of investments in the power sector) and sales to power plants will increase. * Source: Eurogas

14. Thank you!