Current report no.: 28/2018

Agreement with the strategic brine supplier

Current report no.: 28/2018 

Date of preparation: 2018-10-10

Abbreviated name of the Issuer: CIECH S.A.

Subject: Agreement with the strategic brine supplier

Legal basis: Art. 17.1 of the MAR – Inside Information

Contents of the report:

The Management Board of CIECH S.A. (the “Company” or “Issuer”) informs that on 10 October 2018, a tripartite agreement was concluded between the Issuer, a subsidiary of the Issuer - CIECH Soda Polska S.A. (the "Subsidiary" or "CIECH Soda Polska") and Inowrocławskie Kopalnie Soli "Solino" S.A. with its registered office in Inowrocław ("IKS Solino") (the "Agreement").

IKS Solino is a strategic brine supplier for the Company. The brine is processed by the Production Plants of CIECH Soda Polska: in Inowrocław - Mątwy and Janikowo.

The subject matter of the agreement is the construction by IKS Solino of a brine pipeline to connect the manoeuvring tank owned by IKS Solino in Inowrocław - Mątwy with the Production Plant of CIECH Soda Polska in Janikowo (the "Connection").

The construction of the Connection will make it possible to connect the technological lines of both Production Plants of CIECH Soda Polska with one brine pipeline. IKS Solino agreed to construct the Connection by 30 June 2021.

The Connection will improve the safety of brine supplies, including ability to supply the brine to both Production Plants of CIECH Soda Polska, from one of the IKS Solino mines, in particular, in the event of a failure, the need to carry out renovation work or modernisation of the existing transmission infrastructure.

At the same time, the Connection will enable IKS Solino to comply with its obligations under the Act of 16 February 2007 on stocks of crude oil, petroleum products and natural gas, the principles of proceeding in circumstances of a threat to the fuel security of the State and disruption on the petroleum market.

As part of the Agreement, CIECH Soda Polska agreed to  establish transmission easements for IKS Solino on the properties through which the planned Connection will run, on condition subsequent that the Connection is put into use on or before 31 July 2021. 

The Agreement also provides for the regulation of the legal status of the existing transmission infrastructure and other installations necessary for the implementation of the economic intentions of the Parties, including the sale of the transmission infrastructure elements by CIECH Soda Polska to IKS Solino, as disclosed on the list of critical infrastructure. The transmission infrastructure will be sold at market prices.

In addition, the Parties agreed to discuss further cooperation in the supply of brine by IKS Solino to the Company, in particular, brine supplies after 31 December 2025.

Legal basis: article 17.1 of the Regulation of the European Parliament and of the Council (EU) No. 596/2014 of 16 April 2014 on Market Abuse (the Market Abuse Regulation) and repealing Directive 2003/6/EC of the European Parliament and of the Council and Commission Directives 2003/124/EC, 2003/125/EC and 2004/72/EC (Official Journal of the European Union L No. 173, p. 1) (the “MAR”).

Signatures of individuals representing the company:

Dawid Jakubowicz – Acting President of the Management Board
Krzysztof Szlaga – Member of the Management Board

Do góry