PGNiG Secures another Long-Term Contract for the Supply of American LNG

Source: 5/16/2022, Location: Europe

Polskie Górnictwo Naftowe i Gazownictwo has concluded an agreement with Sempra Infrastructure specifying the main provisions of the contract for the purchase and sale of 3 million tonnes of liquefied natural gas. Gas would be collected from two liquefying terminals on the Gulf of Mexico, and Poland would be delivered to, inter alia, through the floating regasification terminal in the Bay of Gdansk.

The agreement concluded by PGNiG and Sempra Infrastructure (Sempra) provides for the signing of a 20-year LNG purchase and sale contract from the expanded Cameron LNG liquefying terminal in Louisiana and from the planned Port Arthur LNG terminal in Texas. From the former, PGNiG is to receive 2 million tonnes, and from the latter - 1 million tonnes of LNG per year, which in total corresponds to approx. 4 billion cubic meters. natural gas after regasification annually. The parties assume that the implementation of the contract may start in 2027. The future contract would be based on the free-on-board formula, which means that the pick-up and transport of the goods is the responsibility of the buyer.

- The agreement signed today opens the way to negotiating the detailed terms of the contract, which will ensure PGNiG will receive LNG from a reliable and valued partner. Liquefied natural gas is already one of the pillars of our diversification strategy aimed at increasing the country's energy security and developing the commercial potential of the PGNiG Group. We are determined to go further in this direction, therefore we are taking steps that will allow us to secure access to appropriate gas volumes in the future. We take into account the planned launch of a floating regasification terminal in the Gdansk Bay, which has a chance to become an important element of gas import infrastructure for Poland and the entire region - emphasized Iwona Waksmundzka-Olejniczak, President of PGNiG SA.

The Cameron LNG condensing terminal indicated in the agreement was launched in 2019. Currently, the installation has the capacity to produce 12 million tons of LNG per year. Sempra Infrastructure, together with its partners, plans to expand the terminal in the coming years and increase its production capacity to almost 19 million tonnes of LNG per year, which will allow the implementation of the planned contract with PGNiG.

The Port Arthur LNG terminal is to produce approximately 13.5 million tonnes of LNG per year in the first phase of operation. The project has already obtained all the necessary permits to start the investment.

- Today's agreement underlines our commitment to ensuring energy security for Poland and our global partners thanks to long-term contracts for the sale of LNG - said Dan Brouillette, President of Sempra Infrastructure . - Our relations with PGNiG are a key element of this commitment, therefore we are glad that we will be able to continue our close cooperation with PGNiG for safe, reliable and increasingly environmentally friendly energy supplies - he added .

The commissioning of the regasification terminal in Gdansk Bay is the responsibility of GAZ-SYSTEM, which already owns the President Lech Kaczynski in Swinoujscie. The gas terminal in Gdansk is to use a Floating Storage and Regasification Unit (FSRU). The investor plans that the terminal will have a regasification capacity of approx. 6 billion cubic meters. natural gas annually. GAZ-SYSTEM has already carried out the first phase of the so-called Open Season procedures, the purpose of which was to test the interest of market participants in using the terminal. As part of the first stage of the procedure, PGNiG placed an order for FSRU regasification services.

PGNiG already has long-term contracts for the supply of American LNG with a total volume of 7 million tons per year, which is over 9 billion cubic meters. after regasification. The agreements provide for a significant increase in supplies from the USA from 2023. The company has reserved the full regasification capacity of the terminal in Swinoujscie, which, after the expansion of the installation, will allow it to accept cargo with a volume of 6.2 billion cubic meters from this year. gas after regasification, and ultimately, from 2024 - 8.3 billion cubic meters. annually. The PGNiG Group also uses the terminal in Klaipeda - thanks to the Poland-Lithuania gas pipeline launched in May this year, supplies received in this installation can be directed to the Polish market.

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