Poland opts for US LNG in Gazprom snub

Poland’s state-run gas utility PGNiG has signed a 20-year deal for US liquefied natural gas (LNG) imports and says it will spend €200 million on a long-term project to deliver Norwegian gas. PGNiG’s 1997 Yamal contract with Gazprom expires in December 2022, but the decision whether to extend it must be taken by next year. PGNiG is expected to receive 2 million tonnes of US LNG annually, or 2.7 billion cubic metres of natural gas, from 2022 onwards. Law and Justice party (PiS) Prime Minister Mateusz Morawiecki said the deal would secure and strengthen the “sovereignty” and “competitiveness” of the Polish energy sector. The agreement ensured Polish energy security, said energy minister Krzysztof Tchorzewski, who referred to Poland opting for natural gas over coal as a “cultural good”. Poland is the seventh-largest gas consumer in the EU, using around 17 billion cubic metres (bcm) of gas a year (about a quarter of German consumption). It currently imports over half of its natural gas from Gazprom. Gas demand within Poland is due to rise as coal-powered electricity plants are due to be replaced by gas alongside plans to make Poland a regional gas hub. Poland is planning gas links to the Czech Republic and Slovakia next year, Lithuania in 2021 and to Denmark in 2022. A new link to Ukraine – which also wants to reduce its dependency on Russia – is being discussed. PGNiG said its gas sales rose 9 per cent year on year to 20.5 bcm from January to September. The company saw imports increase 5.4 per cent to 10.6 bcm over the same period, with the bulk of supplies – 7.9bcm – coming from Gazprom, PGNiG’s preliminary report said. It bought 1.96 bcm of gas via the Swinoujscie LNG terminal in Poland, with that rate expected to rise exponentially. US LNG PGNiG’s agreement with two subsidiaries of US-based Venture Global LNG is due to supply up to 2 million tonnes of LNG per annum, the equivalent of 2.7 bcm of natural gas. US Deputy Secretary of Energy Dan Brouillette said Washington wanted Europe to diversify its sources of fossil fuels away from Russia. As Donald Trump and US Energy Secretary Rick Perry “have made clear, the US wants to provide Europe with a reliable alternative, acting as a large-scale, stable supplier that operates on an open-market basis”, the energy chief added.

https://www.energy-reporters.com/industry/poland-opts-for-us-lng-in-gazprom-snub/