Poland’s efforts to reduce its energy dependence on a single supplier continued in 2018, with natural gas imports from Russia slipping more than 6% from 2017 levels as liquefied natural gas (LNG) imports from Qatar, Norway and the United States jumped by nearly 60%, state-owned oil and gas company Polskie Gornictwo Naftowe i Gazownictwo S.A. (PGNiG) said Wednesday.
LNG imports from Qatar, Norway and the United States in 2018 rose by nearly 1 billion cubic meters (Bcm), or 35.3 Bcf, to more than 2.71 Bcm (95.7 Bcf), which compares to the roughly 1.72 Bcm (60.7 Bcf) that was imported from those countries in 2017, the company said. Meanwhile, PGNiG imports from the East slid to 9.04 Bcm (318 Bcf), down from 9.66 Bcm (320 Bcf.)
LNG imports accounted for more than 20% of Poland’s total import volume, up from just 8.4% in 2016, while the remaining volume came from natural gas imports from the western and southern directions.
“PGNiG has been successfully implementing its strategy of reducing the dependence on a single dominant supplier,” the company said.
Indeed, the rapid increase in LNG imports is primarily the effect of an agreement with Qatargas signed in 2017. Under the agreement, Qatargas boosted its exports to PGNiG to 2 million tons/year (mtpy.) After 2020, annual imports from Qatar may even reach 2.7 Bcm after regasification, the company said.
In addition, Poland is set to receive the first U.S. LNG cargo in 2019 under a 24-year deal reached last November with Cheniere Energy Inc. for the purchase of about 1.45 mtpy.
The Polish utility also signed a 20-year supply deal in December with Sempra Energy for LNG supplied from the company’s planned Port Arthur LNG LLC project in Jefferson County east of Houston. And last summer, PGNiG signed a 20-year, 2 mtpy agreement with subsidiaries of Venture Global LNG to take exports over 20 years from proposed LNG projects that would be sited in Louisiana.
Under its U.S. contracts, PGNiG would have an incremental yearly portfolio of more than 7.3 Bcm (257.8 Bcf) after regasification (about 5.5 million tons of liquefied gas) during the years 2023-2042.
Still, the take-or-pay clause in the Yamal contract signed in the mid-1990s obliges PGNiG to pay Russian’s Gazprom until the end of 2022 for approximately 85% of the contracted volumes of gas, “regardless of whether we bring them to Poland or not,” according to PGNiG’s Vice President for Commercial Affairs Maciej Woźniak.
“We must therefore continue to make such purchases for four more years to come, but we are trying to reduce them to the contractually required level,” Woźniak said.
In addition to its LNG portfolio expansion, the company is preparing to start supplying the Polish market with gas produced on the Norwegian Continental Shelf, following the late 2022 launch of the 140-mile, 967 MMcf/d Baltic Pipe interconnection through the North Sea, Denmark and the Baltic Sea.
PGNiG’s current priority is to build “an alternative, long-term portfolio of secure supplies” from 2023 onwards, based on market principles and prices, Woźniak said.
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