The Polish Oil Mining and Gas Extraction company (PGNiG) has signed annexes to the agreements for liquified natural gas (LNG) supply with their American partners, which include Venture Global Plaquemines LNG, LLC and Venture Global Calcasieu Pass, LLC.
These annexes will increase the volume of the gas supply by 2 million tons annually up to 5.5 million tons of LNG annually. This corresponds to around 7.4 billion cubic meters of natural gas after regasification.
The annexes concern contracts signed by PGNiG and Venture Global LNG in 2018. In the case of the contract with Venture Global Calcasieu Pass, the annex entails an increase of the amount of gas purchased by PGNiG by 500,000 tons, up to 1.5 million tons per year.
On the other hand, the annex to the contract with Venture Global Plaquemines increases supply volume by 1.5 million tons up to 4 million per year.
Minister of State Assets Jacek Sasin declared that when the Yamal Contract with Russia expires in 2022, Poland will no longer be forced to make supplementary gas purchases from the East.
“Owing to these annexes, owing to the assets purchased in Norway, thanks to Baltic Pipe and the new gas port, thanks to investments carried out by Gaz-System, Poland will be able to diversify its gas supply and not only ensure energy security but also fulfil PGNiG’s business aims,” he said.
Sasin noted that the share of Russian gas in Polish energy has already decreased to 60 percent, and he hoped that in the near future these proportions will change rapidly.
PGNiG CEO Paweł Majewski pointed out that purchasing LNG gas from the U.S. is not only an element of diversifying Poland’s gas supply but also presents unique trade opportunities. Majewski explained that the contracts with American companies were singed under the free-on-board formula which allows Poland to trade LNG across the whole world. As part of this, PGNiG will charter four gas carriers which will be able to transport LNG anywhere in the world.
The free-on-board formula entails also that PGNiG is responsible for collecting the purchased gas. In this case, the gas will be taken from two liquification terminals – Calcasieu Pass and Plaquemines at the Gulf of Mexico. The first deliveries from Venture Global LNG are planned for early 2023.