Poland Ups US LNG Purchases
Polish state-owned gas company PGNiG has signed up for another 1.5mn metric tons/year of US LNG with developer Venture Global, it said June 12, during a visit by Poland's president Andrzej Duda to Washington DC.
Under this agreement, the volume of LNG from the Plaquemines terminal will increase from 1mn to 2.5mn metric tons/year. Deliveries will start on the commercial operation date, expected in 2023, which is after Poland's take or pay contract with Gazprom expires. This new amendment raises PGNiG’s total commitment with Venture Global LNG projects to 3.5mn mt/yr, from Calcasieu Pass (1mn mt/yr) and Plaquemines (2.5mn mt/yr), it said.
All the contracts are for 20 years and free on board, meaning that PGNiG can decide where to sell the gas.
PGNiG CEO Piotr Wozniak said the deal was at a "highly competitive" price. US LNG is becoming more competitive, which is confirmed by consecutive quarters of increased imports by Europe, said PGNiG's head of trade, Maciej Wozniak.
The joint CEOs of Venture, Mike Sabel and Bob Pender, said that with "Calcasieu Pass already under construction and progressing on schedule, this agreement further demonstrates our ability to offer low-cost LNG from our Plaquemines project to our international partners. Plaquemines LNG uses the same highly efficient and reliable process system as Calcasieu Pass, provided by Baker Hughes.” They said the project’s steam turbines and the generators for those turbines will be manufactured in Poland.
The Federal Energy Regulatory Commission (Ferc) issued May 3 a Final Environmental Impact Statement for both the Plaquemines LNG facility and the associated Gator Express Pipeline.
LNG prices for spot delivery have fallen sharply this year in Asia and Europe as capacity comes on stream faster than demand can absorb it. This has raised the question of some US exports halting this summer as the cost of liquefying, exporting and regasifying the commodity could exceed the market price at the destination market.
There have been predictions of gas supply and demand coming back into balance early next decade, while there could be winter spikes in European demand that could see surging prices a few years before then. There is still the threat of a break in flows of gas across Ukraine, for example, although observers do not think that would serve Ukraine's or Russia's interests.