Polish energy giant PKN Orlen has agreed to a 20-year supply contract for a million tons of liquefied natural gas (LNG) per year from the U.S. terminal in Port Arthur, Texas.
The million tons of LNG will be converted to 1.3 billion cubic meters (m³) of gas for consumption. The price for the contract is calculated on the basis of the Henry Hub index, with supplies starting in 2027.
The contract with U.S. utility company Sempra Infrastructure means the total volume of contracts PKN Orlen has with American suppliers now stands at close to 8 million tons per annum.
The contracts are mostly on a free-on-board (FOB) basis, meaning the user is responsible for the costs of transport and loading. This is why, according to Orlen, the company is building its own fleet to transport the LNG. Two vessels being specially constructed will be available this year, and there will be eight such units by 2025.
Daniel Obajtek, Orlen’s CEO, told journalists that the company also wants to increase the amount of gas imported from the Norwegian shelf to the level of 4 billion cubic meters. He believes these imports will help the company to fully meet its demand.
For this year, Poland’s gas storage is running at full capacity, 3.2 billion cubic meters. It can count on 3.7 billion cubic meters from its own production and also has 80 percent of the Baltic Pipe’s capacity, which equates to 6.5 billion cubic meters.
