To the west is the J.D. Murphree Wildlife Management Area, a lush 24,500-acre tract managed by Texas Parks & Wildlife that is brimming with mosquitos, feral hogs and alligators. It is a migratory waterfowl habitat and home to species as diverse as mottled ducks, muskrats, nutria, river otters, coyotes, armadillos, striped skunks and bobcats, among others. In September, the area is a magnet for hunters in pickups armed with insect repellant and Remingtons in search of blue-winged teal.

Mosquitos, armadillos, hunting … throw in oil and gas and this spot in Jefferson County is as Texas as barbecue. So let’s throw in oil and gas. Directly to the east on the banks of the narrow Sabine-Neches Waterway, which flows into the Gulf of Mexico, is the site of but one of several proposed LNG terminal projects on the Gulf Coast that are already changing the world.

That’s because farther to the east—far, far from Texas and its barbecue sauce—is Gazprom’s headquarters in an imposing tower in a compound at 16 Nametkina St., Moscow, GSP-7, 117997, Russian Federation. And somewhere inside that glass and concrete structure that appears to have been designed using a Lego set, the Russian natural gas giant’s strategists watch projects on the U.S. Gulf Coast closely and ponder the next move in a geopolitical chess game.

Folks at Gazprom probably give little thought to feral hogs but a lot of thought to the land between those hogs and the waterway. When Sempra Energy’s (NYSE: SRE) Port Arthur LNG liquefaction plant and terminal is complete, it will supply 15% of Poland’s natural gas needs. That’s 2.7 billion cubic meters (Bcm) per year (after regasification) that a growing central European economy will source from the unit of San Diego-based Sempra LNG and Midstream, instead of Russia.

By itself, that’s not much to worry about for a company like state-controlled Gazprom, which dominated the European gas market in 2017 with a 34.7% share, shipping 194 Bcm westward. But it’s a signal that things are changing.

“It’s a very risky business in this area of the world thanks to the supplier,” Maciej Woźniak, vice president of commercial affairs for PGNiG SA, the Polish national oil and gas company, told Hart Energy last year in Washington during the triennial World Gas Conference. Having multiple sources of gas is critical for the countries of Central and Eastern Europe, which collectively consume about 100 Bcm a year.

Poland seeks to develop itself as a gas distributor for the region, which includes the Baltics, Slovakia, the Czech Republic, Romania and Ukraine.

“All of those countries are suffering from one dominant supplier and all of them have their own strategy which is more or less the same: to be more independent as to the origins and directions of supply,” Woźniak said. “All of those countries of Central Europe together create a huge 100 Bcm gas market which might be supplied from different routes. Poland might be a gate for LNG and Norwegian gas to that region.”

In 2018 the Polish company has signed long-term contracts for LNG supplies with several U.S. producers: Cheniere, Venture Global LNG and Port Arthur LNG (Sempra). Having multiple sources of gas is critical for the countries of Central and Eastern Europe. 

The capability of handling increased volumes is also important. Polskie LNG, operator of Poland’s LNG terminal at the Port of ? Świnoujście , announced Jan. 27 that it had obtained permits to expand the facility. The project includes construction of a third storage tank, expansion of the facility’s regasification capacity, addition of an LNG-to-rail installation and construction of a new jetty.

A principal part of Poland’s strategy is the Baltic Pipe project, a natural gas pipeline linking Norway’s Europipe II pipeline in the North Sea gas fields to the transmission systems of Poland and Denmark. The 110-km line, scheduled to begin moving gas in October 2022, will add 10 Bcm a year to the regional market, or four times Denmark’s gas consumption in all of 2016.

“We hope that the Baltic Pipe’s in-service in 2022, our contracted LNG volumes and the expiration of our long-term contract with Gazprom will be a real breakthrough in terms of supplies and security of supplies to this region,” Woźniak said. “We hope that we will play a quite substantial role in this region, having all those contracts, own production domestically and on the Norwegian Continental Shelf, and booked capacity of those facilities—Baltic Pipe and LNG terminal in Świnoujście ,” Woźniak said. 

The Trump administration has expressed similar hopes.

“Reliance on a single foreign supplier can leave a nation vulnerable to extortion and intimidation,” President Donald Trump said during his address to the United Nations General Assembly in September. “That is why we congratulate European states, such as Poland, for leading the construction of a Baltic pipeline so that nations are not dependent on Russia to meet their energy needs. Germany will become totally dependent on Russian energy if it does not immediately change course.”

The president was referring to the $10.9 billion Nord Stream 2 gas pipeline project that a Gazprom-led consortium is attempting to obtain approval to build. The pipeline, a parallel line to the Nord Stream undersea pipeline that already delivers gas from Russia through the territorial waters of Finland, Sweden and Denmark to Germany, would double capacity from 55 Bcm to 110 Bcm per year.   

With European natural gas production in decline and countries seeking to move away from coal to cleaner-burning gas, it might seem that Nord Stream 2 would provide a market solution to meet a demand. Not necessarily.

“The issue with Nord Stream 2 is more geopolitical than it is commercial,” George Popps, Stratas Advisors’ director of its global LNG service, told Hart Energy. “The pipeline allows Russia to skip Eastern Europe (including Ukraine) in its deliveries of natural gas to Germany, allowing Russia huge amounts of leverage over its Eastern European neighbors—if those countries want natural gas, they need to stay relatively close to Russia.”

This pipelined gas would, in theory, displace LNG and challenge exporters to the European market such the U.S. and Qatar. But, echoing Woźniak and the Trump administration, Popps said security of supply continues to be a concern of Central and Eastern European countries that have relied completely on Gazprom’s deliveries in the past. The Russian national company shut off the gas supply during the winters of 2005-2006, 2008-2009 and last March during a record cold spell.

“Poland’s LNG terminal, while only opening up one physical point of entry, opens the gas market to any of the dozens of LNG exporting countries worldwide, instantly freeing the market noticeably,” he said. “It certainly doesn’t hurt to keep Gazprom in the mix (especially if it keeps suppliers competitive with each other), but Poland, Lithuania and others of the like will be wary of putting too many eggs in Gazprom’s basket.”

Cheniere deliveries for PGNiG will commence this year, while purchases from Port Arthur LNG (Sempra) and Venture Global LNG companies will be possible once their export plants on the Texas Gulf Coast become operational in 2022 and 2023. Port Arthur LNG moved closer to that goal on Jan. 31 when the U.S. Federal Energy Regulatory Commission issued a final environmental report.

“Storage facilities in Poland can store about 3 Bcm of gas or about 20% of annual consumption,” Woźniak said. The country’s domestic production is about 4 Bcm per year. Add that to LNG purchases from U.S. companies and Qatargas, and spot deliveries, and PGNiG’s LNG portfolio beginning in 2023 totals almost 10 Bcm per year (following regasification) from LNG contracts. Part of that volume will be set aside for trading.

Diversification of supply, for Poland, is imperative. The strategic importance of Port Arthur LNG has been recognized by several global energy players and has reportedly attracted investment interest from Saudi Arabia, among others. But even with the contract with Port Arthur LNG in hand, Poland is intent on developing a stable of suppliers and has signed contracts with other U.S. LNG companies.  

"We are looking forward to our long-term partnership with all our U.S. partners," Wozniak said. "We don't want to get into the same situation as we had with Gazprom for many years."