Gulf Coast LNG Heading to Poland Under Long-term Deal
Polish Oil and Gas Company (PGNiG) and Venture Global have signed 20-year sales and purchase agreements under which the former will receive US-sourced liquefied natural gas for domestic customers or for resale, Venture Global reported on the 17th October.
“These are the first long-term contracts for purchase of LNG from the US announced in Central Europe,” Maciej Woźniak, vice president of PGNiG’s management board for trade, said.
“The contract conditions in the USA are very attractive. The LNG price is based on the American Henry Hub index along with liquefaction costs.”
The agreements will enable PGNiG to purchase LNG on a free on board (FOB) basis when commercial operations begin at the two LNG export facilities Venture Global is developing in South Louisiana, Venture Global stated.
The company’s Calcasieu Pass LNG facility near Lake Charles is slated to start commercial operations in 2022 and its Plaquemines LNG project near New Orleans the following year, the company added.
Under the deals, PGNiG will purchase two million tons per annum (mtpa) of LNG – one mtpa from each facility – for two decades.
Venture Global stated the FOB arrangement means that it, as the seller, will deliver LNG to a tanker ship at the loading port and that the purchaser PGNiG will freely dispose of the load – including decide on the cargo destination.
“Recently signed contracts are a milestone towards building PGNiG’s position in the global liquefied natural gas market,” noted Piotr Woźniak, president of PGNiG’s management board.
“Thanks to the FOB formula, we will be able to decide, independently and based on our needs at a given time, whether the purchased LNG load should be directed to Poland or be used for further trading through our London office.”
The two mtpa of LNG amounts to roughly 2.7 billion cubic metres of natural gas after regasification, Venture Global stated. Based on vessel capacity, that equates to more than 25 cargoes a year, the company added.
“We are honoured to become a partner of both Poland and of PGNiG, one of Europe’s most important international oil and gas companies,” Venture Global LNG co-CEOs Mike Sabel and Bob Pender jointly stated.
“We are greatly looking forward developing a long-term supply relationship with PGNiG, who will be joining our existing, high quality partners: Shell, Edison SpA, Galp, BP and Repsol.”
Source: Rigzone