Puławy, January 13th 2009

Press Release

"Pulawy" and PGNiG sign cooperation agreement

On 12 January 2009, Polskie Górnictwo Naftowe i Gazownictwo SA and Zakłady Azotowe "Puławy" SA signed an agreement on the joint implementation of investment projects involving the use of natural gas, in particular natural gas of domestic origin.

Under the agreement, "Puławy" and PGNiG will consider the preparation of investment projects involving the use of natural gas, including projects located in other natural gas-producing countries.

"We would like to prepare jointly some good investment projects which will allow us to better use natural gas, in particular domestic natural gas," said Michał Szubski, president of PGNiG SA.

Some of the proposed projects involve expansion of the production capacity of the "Puławy" plant through installing production lines for mineral fertilisers or other natural gas-based products. Other investment projects may also be pursued. Both companies further agreed that in the case of domestic investment projects, Puławy will be the first location to be considered.

"We hope that this agreement will allow us to expand our production capacity and strengthen the position of our Company and the entire region," said Paweł Jarczewski, president of Zakłady Azotowe "Puławy" S.A. "Our companies are in good financial condition, which warrants the success of the planned undertakings."

The agreement is valid until 31 December 2009 and may be extended. During this year, the companies will assess the technical and economic feasibility of the project, evaluate the demand for resources, in particular for natural gas, prepare the business plan and determine the legal framework for implementation of the project. A new company might also be established in which both parent companies would have an equal shareholding.

In order to implement the agreement, the parties may appoint special Task Teams charged with preparing and presenting to the Management Boards of both companies a detailed project concept with terms of implementation.