PGNiG will probably need to boost investment by 30 percent in a planned liquefied natural gas terminal because of raising prices of construction materials, Wall Street Journal Polska reported. The company may also delay the opening of the port by about six months to 2012, the newspaper said, citing Bogdan Pilch, head of the Polish unit of Gaz de France SA, Polskie Gornictwo's partner in the investment.
Our view: As we have said earlier, the returns on LNG construction might be too uncertain and thus the project could be too risky for the company. It is more than possible that the actual amount of investments will exceed the planned one, which will be reflected in company’s efficiency. However, since we believe that market has already priced in the risk related to this investment, the trading impact should be rather neutral.