It's pricey but now that an expensive LNG terminal has been built the expenditure has to be justified -- it can not be allowed to remain idle even if operating it means throwing more good money after bad
Polish state-controlled gas company PGNiG has signed a 20-year gas supply deal with US company Venture Global LNG to receive about 2.7bn cubic metres (cm) of gas annually, PGNiG said on October 17.
The deal is part of a strategy pursued by PGNiG to build a portfolio of LNG supply deals. Poland has been working to increase diversification of its gas supplies to reduce dependency on imports from Russia, which Warsaw considers a hostile country.
The agreements are in the free-on-board formula, which means the buyer has full control of the shipment as soon as it is loaded on to a ship. That will allow the Polish company to resell LNG to clients in markets worldwide.
PGNiG will receive LNG from Venture Global LNG’s two terminals in Louisiana that are set to begin operations in 2022-2023.
The value of the deal with Venture Global LNG was not disclosed. The deal follows a five-year LNG supply contract that PGNiG signed in November with UK-based Centrica.
Poland consumes about 16bn cm of gas annually, with around 70% of that volume still originating from Russia under a long-term agreement that expires in 2022.
Warsaw appears increasingly confident, however, that it can source enough alternative gas supplies to do without Russian imports after the Gazprom deal ends.
Poland also has a long-term LNG contract with Qatar and is also working to build a pipeline to transmit gas from Norway – where PGNiG has production assets – via Denmark to Poland. A floating LNG terminal in the Gdansk Bay is under consideration as well.
The signing of the deal follows PGNiG’s filing of a complaint on October 16 with the European Union's top court against a deal that the European Commission struck with Gazprom in May to settle an antitrust case against the Russian company.
The decision proved a disappointment for Poland and other CEE member states of the EU, which had lobbied for the Commission to fine Gazprom for what they said – and to which the Commission agreed – were years of overcharging for gas and blocking its free flow between individual markets.
Source: bne IntelliNews