U.S. energy firm Sempra Energy said on May 16 it would sell three million tonnes of LNG each year to Poland’s PGNiG, in another sign of rising interest in U.S. supply following Russia’s invasion of Ukraine.
Buyers wary of importing natural gas from sanctions-hit Russia have been turning to U.S. LNG in recent months as the war in Ukraine tightens an already under-supplied market.
The U.S. this year is expected to surpass Australia and Qatar as the world’s largest LNG exporter, delivering more than 12.2 Bcf/d.
Sempra will provide PGNiG (Polish Oil & Gas) with LNG for 20 years under the deal.
About two million tonnes of LNG per annum will come from Sempra’s Cameron LNG Phase 2 project in Louisiana, while the rest would come from the Port Arthur LNG project in Texas.
PGNiG will also have the option in 2022 to reallocate volumes from the Cameron Phase 2 project to the Port Arthur project, Sempra said in a statement.
PGNiG said the agreement opens the way to negotiate terms of a future contract for supply starting in 2027 on a free-on-board basis.
The volumes will be received via a floating storage and regasification unit which Poland plans to operate on the Baltic Sea near Gdansk.
LNG is one of the pillars of Polish plans to boost its energy security as it seeks full independence from Russian gas supplier Gazprom.
Gazprom halted shipments to Poland last month after Warsaw refused to switch to payment in roubles.
“We are determined to continue marching in this direction, that’s why we are acting to make sure we have access to adequate volumes of gas in the future,” PGNiG CEO Iwona Waksmundzka-Olejniczak said in a statement on May 16.
PGNiG’s LNG supply portfolio with U.S. partners currently stands at 7 million tons or 9 Bcm after regasification.
A contract with Sempra would boost that by more than 40%. Poland consumes about 20 Bcm of gas annually.
Recommended Reading
Occidental to Divest Some Permian Assets after Closing CrownRock Deal
2024-02-21 - Occidental CEO Vicki Hollub said plans to divest non-core Permian assets would come after closing the pending acquisition of CrownRock — but reports have since emerged that the company is considering selling its share of Western Midstream Partners, valued at about $20 billion, according to Reuters.
Enterprise Buys Assets from Occidental’s Western Midstream
2024-02-22 - Enterprise bought Western’s 20% interest in Whitethorn and Western’s 25% interest in two NGL fractionators located in Mont Belvieu, Texas.
EIA: E&P Dealmaking Activity Soars to $234 Billion in ‘23
2024-03-19 - Oil and gas E&Ps spent a collective $234 billion on corporate M&A and asset acquisitions in 2023, the most in more than a decade, the U.S. Energy Information Administration reported.
Report: Occidental Eyes Sale of Western Midstream to Reduce Debt
2024-02-20 - Occidental is reportedly considering a sale of pipeline operator Western Midstream Partners as the E&P works to close a $12 billion deal in the Permian Basin.
ARM Energy Sells Minority Stake in Natgas Marketer to Tokyo Gas
2024-02-06 - Tokyo Gas America Ltd. purchased a stake in the new firm, ARM Energy Trading LLC, one of the largest private physical gas marketers in North America.