The first ever shipment of LNG from the US arrived in Poland on June 7. The purchase see US LNG arrive in Central & Eastern Europe for the first time, with Warsaw accelerating efforts to expand alternatives to buying in Russian supplies.
The cargo remains, for the moment, a one-off purchase on the spot market. Yet the arrival of the fuel, which was loaded via the Sabine Pass terminal operated by Cheniere Energy, still appears a signficicant step in Polish efforts to diversify supply. The US only recently approved gas exports, as shale gas has boosted production.
Polish gas utility PGNiG announced in April it would buy an undisclosed volume of LNG for an unknown price from Cheniere. The company is the operator of the only LNG export terminal in the US.
Poland’s LNG terminal in Swinoujscie is already taking in gas under a long-term contract with Qatargas that expires in 2034, but still has excess capacity to accept cargos from other directions. The terminal can handle 5bn cubic meters (cm) of gas annually, with plans for expansion to 7.5bn cm. Qatargas is to supply around 2.7bn cm a year.
Poland consumes around 16bn cm of gas per year; Russia currently supplies around 70% of that volume under a long-term agreement. However, the deal expires in 2020.
Warsaw appears increasingly confident it could source enough alternative supply to do without Russian supplies after 2020, when PGNiG's contract with Gazprom ends. However, Warsaw is also clearly hoping to raise its leverage for talks over a new deal with the Russian gas giant.
Apart from growing LNG imports, Warsaw is also working to build a pipeline to transmit gas from Norway – where PGNiG has production assets – via Denmark to Poland. A floating LNG terminal in the Gdansk Bay is under consideration as well.
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