PGNiG Marks 'Historic' US Delivery

Polish prime minister Beata Szydlo and representatives of PGNiG, Cheniere Energy and other officials attended an event June 8 at the country’s LNG import terminal in Swinoujscie to mark the arrival the previous day of Poland’s first US LNG cargo.

It is the first US LNG delivery to central and eastern Europe and PGNiG has said it plans to conclude more spot agreements. The cargo was bought spot by PGNiG’s LNG trading office in London from Cheniere Energy, which supplied it from its Sabine Pass terminal in Louisiana.

“Delivering this cargo from Cheniere to Poland demonstrates the continued demand for US LNG and for Cheniere’s full-service model that includes the delivery of LNG directly to customers”, said Andrew Walker, Vice-President, Strategy at Cheniere Energy. “PGNiG has been an excellent partner in this purchase, and Cheniere is pleased to support Poland accessing LNG from the US.”

Poland's debut US cargo was delivered aboard the Clean Ocean (Photo credit: shipowner Dynagas)

PGNiG described the event as “historic.” CEO Piotr Wozniak said it “proves that Poland can successfully act as a gate for American LNG to this part of Europe. It strengthens PGNiG’s international position and allows us to achieve our business goals even more efficiently. The growing involvement of our company in the LNG market and the purchase of gas from the USA are the consequences of our strategy to diversify gas delivery sources for Poland allowing us to build energy security of our state.”

It is PGNiG’s second spot LNG cargo purchase, following one delivered from Norway in June 2016. The company has announced more spot deliveries, with the next one already planned for July. The Swinoujscie terminal however remains significantly under-used, despite several Qatari term LNG cargo deliveries to PGNiG. Notwithstanding that, state gas grid operator Gaz System said in March it was thinking of opening a 2nd Polish LNG terminal, this time a floating one (or FSRU) at Gdansk possibly by 2022. 

On June 6, Gaz System together with its Danish counterpart Energinet initiated an Open Season process for their planned 10bn m³/yr Baltic Pipe project that aims to provide access to Norwegian gasfields for the Polish and Danish/Swedish gas markets from late 2022, but which may provide a role for the Swinoujscie terminal in improving security of supply for the Danish/Swedish gas market too.

Poland imports most of its gas, principally by pipe from Russia's Gazprom, but has ambitions to become a gateway for gas from new sources into central Europe by building up to 2,000 km of new pipelines, and to diversify its own supplies. Some consumers fear that will push up prices. But with a global glut of LNG, spot deliveries are expected to remain low-priced for the next few years. Poland still also has some indigenous gas production.

Also June 8, PGNiG announced the official launch of a new 'international centre of excellence on coal mine methane' (or CBM), an expert body that will open in Poland under the auspices of the UN Economic Commission for Europe. It will study the development of new methods of capturing and use of methane as a valuable energy source. "We want to share our experience in this area but also benefit from expertise of the centre's specialists," said PGNiG vice-president of development Lukasz Kroplewski.

Most observers however see little evidence that Poland's other unconventional gas resource, shale gas, is likely to be developed any time soon. 

Mark Smedley