June 27, 2018 / 6:19 AM / 2 years ago

UPDATE 1-Poland's PGNiG signs agreements for long-term LNG supplies from U.S.

(Adds details, background)

WARSAW, June 27 (Reuters) - Poland’s state-run gas firm PGNiG said late Tuesday it signed long-term agreements with U.S. Port Arthur LNG and Venture Global LNG for liquefied natural gas (LNG) deliveries, in another attempt to reduce its reliance on Russian supplies.

Under the agreements, PGNiG will conduct talks with both the American companies regarding provisions of the purchase of 2 million tonnes of LNG annually from each firm over 20 years, the Polish company said.

Cargoes from the Port Arthur LNG facility being developed in Jefferson County, Texas, will be supplied starting 2023, while supplies from Venture Global LNG will be delivered from Calcasieu Pass and Plaquemines LNG export facilities in Louisiana, which are expected to be completed in 2022 and 2023 respectively.

Deliveries may be subject to further trading on international markets and will be supplied on a free-on-board basis in which the purchaser is responsible for transport of cargo from a loading port, PGNiG added.

The agreements do not mean that PGNiG will be obliged to sign final LNG purchases’ contracts.

Deliveries of 4 million tonnes of LNG from both U.S. firms will correspond to a total of 5.4 billion cubic metres (bcm) of gas and compare with around 16 bcm of gas being used in Poland annually.

“Purchasing of liquefied natural gas in the USA will not only allow further diversification of our import portfolio following 2022, but will also let us develop our trading competences and enable PGNiG’s presence as a global LNG market player,” PGNiG CEO was quoted as saying in a statement.

The dominant gas firm imports most of the gas and resells it from Gazprom. However, Poland does not intend to extend the long-term deal with Gazprom after it expires in 2022.

As a wider plan to diversify Poland also signed in November 2017 a mid-term deal with Centrica LNG Co Ltd on nine LNG shipments in 2018-2022.

Poland plans to build a gas pipeline to Norway via the Baltic Sea and Denmark to be able to receive up to 10 bcm of gas annually from the deposits at the North Sea. (Reporting by Agnieszka Barteczko; Editing by Subhranshu Sahu and Sherry Jacob-Phillips)

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