Poland Firms Up US LNG Deal

US Venture Global and state-controlled Polish Oil and Gas Company (PGNiG) have converted their June heads of agreement into binding contracts for the sale and purchase of LNG, they said October 17.

One covers 1mn mt/yr supply for 20 years from Calcasieu Pass LNG, expected to come onstream 2022; and the other is for the same amount and duration, from Plaquemines LNG, expected at some point in the following year; both will be for supply free on board (fob) in the US. 

PGNiG described the contracts as "a milestone towards building PGNiG's position in the global liquefied natural gas market." The cargoes may be taken and sold anywhere in the world, "based on our needs at a given time.... The contract conditions in the USA are very attractive. The LNG price is based on the American Henry Hub index along with liquefaction costs.” It said the contracts are the first long-term contracts for purchase of US LNG to have been announced in central Europe.

Venture Global LNG said PGNiG was "one of Europe’s most important international oil and gas companies. We are greatly looking forward to developing a long-term supply relationship with PGNiG, who will be joining our existing, high quality partners: Shell, Edison, Galp, BP and Repsol.” 

A listed company, PGNiG is the dominant gas supplier in Poland that is 71%-owned by the state. It is planning to either end, or significantly reduce, Russian long-term contractual gas imports from 2022.

PGNiG has yet to firm up a similar US deal - also inked this June - with Sempra LNG & Midstream from the latter's planned Port Arthur LNG project in Jefferson County, Texas; it's envisaged that the Polish firm will lift 2mn mt/yr starting 2023 from Port Arthur over a 20-year period.