First cargo of US LNG under long-term agreement arrives in Poland

Source: press release, 26 July 2019

The PGNiG LNG terminal in Świnoujście
The PGNiG LNG terminal in Świnoujście (photo: PGNiG)

The first cargo of liquified natural gas under the long-term contract between PGNiG and US LNG provider Cheniere Energy has arrived at the President Lech Kaczyński LNG Terminal in Świnoujście. The long-term contract, which was signed in November of 2018, will total approximately 39 bcm of natural gas over the 24-year period of the agreement.

The official reception ceremony of the first delivery at the LNG terminal in Świnoujście included representatives of the government of the Republic of Poland, local authorities, as well as executives from PGNiG and Cheniere Energy.

“Two years ago, in this place, together with our partners from Cheniere we greeted the first ever delivery of American LNG to Poland and to this part of Europe. The cargo, purchased as part of a spot transaction, came from Cheniere. Today we are also meeting with our American partners and with today’s delivery we are launching the first long-term contract for the purchase of LNG from the USA,” says Piotr Woźniak, President of PGNiG Management Board. “Our portfolio of contracts with US suppliers covers over 9 billion cubic metres of natural gas after regasification annually – that is more than we import from Russia. Such a volume strengthens Poland’s energy security, but also gives us the opportunity to actively participate in LNG trading on the global market,” he adds.

Oak Spirit– the LNG carrier that arrived at the terminal in Świnoujście – provided about 165,000 cubic metres of LNG, which after regasification equals about 95 million cubic metres of natural gas. It was the 65th delivery of LNG to Poland since the launch of the LNG terminal.

“This first cargo under our long-term agreement is the start of more than two decades of partnership that will bring reliable, clean, and secure energy to Poland,” says Anatol Feygin, Executive Vice President and Chief Commercial Officer for Cheniere. “We are honoured to stand with our partners today to welcome this inaugural cargo, which will be followed by many more for years to come.”

PGNiG signed a 24-year agreement with Cheniere Marketing International in November 2018. In 2019-2022, the total volume of supplies will amount to approximately 0.52 million tonnes of LNG, or approximately 0.7 billion cubic metres of gas after regasification. In the years 2023-2042, the total import volume will reach approximately 29 million tonnes (about 39 billion cubic metres after regasification) – which means that from 2023, PGNiG will buy approximately 1.45 million tonnes of LNG each year (around 1.95 billion cubic metres of gas after regasification).

Deliveries will be based on DES (delivery ex-ship) formula – delivery to the terminal in Świnoujście is provided by the seller. Earlier, supplies of US LNG were coming to Świnoujście as part of spot transactions and as part of a medium-term contract. PGNiG has received seven cargoes of such type so far. In June 2017, the company received the first ever LNG load from the United States – a spot supply from Cheniere Energy.