PGNiG’s Long-Term Contract for the American LNG Signed

Source: 12/19/2018, Location: North America

Polish Oil and Gas Company and the American company Port Arthur LNG, a subsidiary of Sempra Energy, have signed a 20-year contract for the sales and purchase of liquefied natural gas. On the basis of the concluded agreement, PGNiG will buy annually 2 million tonnes of LNG (approximately 2.7 bcm after regasification). The purchases will commence in 2023 from the Port Arthur LNG terminal, which will be built in Jefferson County, Texas.

LNG purchases will be made on a FOB (Free On Board) basis, with PGNiG responsible for shipping the LNG from the Port Arthur terminal to the final destination. Port Arthur LNG will manage gas pipeline transportation, liquefaction processing and cargo loading, giving PGNiG flexibility in cargo management. PGNiG plans to deliver cargoes to domestic customers in Poland or trade LNG on the global market, once operations commence.

“This agreement marks an important step toward Poland’s energy independence and security,” commented U.S. Secretary of Energy Rick Perry. “As demonstrated with the launch of the Strategic Dialogue on Energy in Poland last month, the Trump Administration remains committed to increasing energy diversity, advancing energy security, strengthening national security, and creating a future of prosperity and opportunity in Poland and throughout the region.”

“This agreement with PGNiG represents an important expansion of our portfolio of contracts for LNG exports and major step forward in the development of our Port Arthur LNG project,” said Jeffrey W. Martin, Chairman and CEO of Sempra Energy. “Last month, we began the commissioning phase of our Cameron LNG liquefaction-export facility in Louisiana. This agreement, along with the great progress on Cameron LNG, continue to validate our growth strategy as we advance our vision to become North America’s premier energy infrastructure company.”

“Our activities show that we consistently implement our strategy. Another long-term contract not only allows us to develop LNG portfolio with a view to delivering to Poland, but it gives us, in the near future, the possibility of trading in LNG purchased on a global scale,” commented Piotr Wo?niak, President of the Management Board of PGNiG. “I am glad that Sempra Energy is among our American partners. I am convinced that we will have good long-term cooperation.”

Port Arthur LNG will be the operator of the Port Arthur terminal being built in Texas off the coast of the Gulf of Mexico. The Port Arthur liquefaction-export facility is proposed to include two natural gas liquefaction trains capable of processing approximately 11 Mtpa of LNG; up to three LNG storage tanks; two marine berths, and associated facilities.

Sempra Energy has so far signed agreements regarding the use of its LNG projects in the Gulf of Mexico and on the west coast of Mexico. Among the partners of the American company – alongside PGNiG – are Total, Mitsui & Co., Mitsubishi, Tokyo Gas Company and Korea Gas Corporation. In aggregate, the projects potentially represent more than 45 Mtpa of LNG export capacity from North America.

“In recent months this is the third contract we have signed with a long-term partner from the USA,” reminded Maciej Wo?niak, Vice-President of the Management Board of PGNiG for Trade. “Starting from 2023, PGNiG will have at least 7.45 million tonnes of liquefied natural gas a year. Such LNG volumes will strengthen the company's position in the LNG market, but will also contribute to increased security of gas supplies for Poland,” he added.

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