LNG from USA

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In June 2017 for the first time in history the LNG from USA will arrive to Poland. Short-time spot type transaction was contracted between PGNiG SA (Polish Oil and Gas Company) and Cheniere Energy – the American company which is the only one that has a permission to export gas. The cargo will ship out from Sabine Pass liquefying terminal in Louisiana and in the first half of June will arrive at the Polish LNG terminal in Świnoujście. This is first one-time supply of American gas to Central-East Europe. The volume of transported source probably won’t be huge – the type of LNG carrier used by Cheniere Energy (with capacity less than 200 000 cubic meters) shows that. The price of gas is classified because of a trade secret.

-This is a historical moment for PGNiG. We have gained a new partner in trade of LNG, and North America is becoming a next reign whence we import this source, after Middle East, and Norway. We constantly realize strategy of diversification supply to Poland. In that way we build a safe and competitive gas market for Polish economy – said Piotr Woźniak, the CEO of PGNiG

-This supply to Poland  testifies of existing demands for American LNG and need for complex business model of Cheniere Energy, which covers a supply of this source straight to the customers – said Jack Fusco, CEO of Cheniere. – We are happy that PGNiG is our partner with this transaction and we support Poland in access for LNG gas with pleasure.

Nowadays Polish government solicits long-term contracts for import of American gas. Recently Deputy Prime Minister Mateusz Morawiecki, and Minister Piotr Naimski have been in Washington. Polish companies are also active: Gaz System (natural gas transmission system operator) in fall have organized a LNG congress with American companies, and CEO of PGNiG SA, Piotr Woźniak, is currently visiting USA

Such moves shows that Warsaw is largely interested in American gas, which in the first time in history will be exported to this part of Europe. There are a few reasons explaining this conjuncture. Firstly PGNiG have paid for reservation of terminal in Świnoujście, and they want to use it effectively. Moreover Poland has to decide about the future of Jamal Contract (Polish-Russian trade agreement about exporting to Poland circa 10 bln m3 of natural gas per year, which covers about 70% of Polish annual demands) which ends in 2022. According to this info Polish government is searching for some alternative to Russia. Shipments of this source from USA could mostly increase diversification of Polish requests and improve position in renegotiation a new contract with Moscow. They could also change the role of Poland – from passive recipient to active trader and Poland could reexport gas to other countries in Central and East Europe which are (or have been) buying blue energy from east direction, for example to Ukraine which has totally cut the gas supplies from Russia.

References:

http://www.energetyka24.com/586773,pierwsza-dostawa-amerykanskiego-lng-do-polski-realny-sukces-analiza
http://www.pgnig.pl/aktualnosci/-/news-list/id/pierwsza-dostawa-lng-od-amerykanskiego-dostawcy-do-polski/newsGroupId/10184
http://www.reuters.com/article/energy-poland-lng-usa-idUSL5N0RB3J720140910
https://www.bloomberg.com/news/articles/2017-04-27/u-s-lng-expands-to-eastern-europe-as-poland-avoids-russian-gas

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