August 31, 2019 / 2:56 PM / 2 months ago

U.S. to help Poland, Ukraine disconnect from Russian gas

WARSAW (Reuters) - The United States, Poland and Ukraine agreed on Saturday to enhance cooperation over secure gas supplies in the region which still relies on Russia.

FILE PHOTO: U.S. Secretary of Energy Rick Perry speaks during a news conference in Jerusalem July 22, 2019. REUTERS/Ronen Zvulun

“We’re helping Poland to reduce its dependence on Russian gas,” U.S. Energy Secretary Rick Perry told a news conference in Warsaw after meeting officials from Poland and Ukraine.

The Polish government official responsible for energy infrastructure, Piotr Naimski, said Poland, which has increased purchases of liquefied natural gas (LNG) from the United States in recent years, would be able to send six billion cubic meters of gas to Ukraine starting from 2021 compared to the current capability of 1.5 bcm.

“We will take every effort to diversify gas supplies to Ukraine, which is now completely dependent on Russian deliveries,” Naimski told the same conference.

Perry, Naimski and Ukraine’s Secretary of National Security Oleksandr Danylyuk signed a memorandum of understanding to enhance security of gas supplies in the region via LNG supplies from the U.S. through Poland’s and Ukraine’s infrastructure which still has to be expanded.

Under a policy it calls energy dominance, the administration of President Donald Trump, who canceled his trip to Warsaw earlier this week, is seeking to slash domestic regulations on energy production to boost oil and gas exports to allies and trade partners.

It is seeking to offer Europe alternative sources of gas to fuel sent via pipeline from Russia, which is generally cheaper than U.S. LNG, but has not always been reliable with Russia at times stopping deliveries to Ukraine and parts of Europe during pricing disputes.

More than a third of Russia’s gas exports to the European Union cross Ukraine, which traditionally uses some of the gas pumped by Russia to European consumers for its own needs in eastern and central regions.

But the Russia-Ukraine gas transit agreement is due to expire in January and Ukrainian energy authorities are worried that Moscow could stop gas supplies through Ukraine, leaving some Ukrainian regions without gas in winter.

Also Poland, which is seen as one of Washington’s closest allies in Europe, still buys most of the gas it consumes from Russia, has taken steps to cut this reliance after 2022 when its long-term deal on gas supplies from Gazprom (GAZP.MM) expires.

Poland’s imports of LNG, including from the U.S., via the Baltic Sea terminal at Swinoujscie have jumped in recent years as part of a wider plan to cut reliance on Russian supplies.

Earlier this week Poland’s state-run gas firm PGNiG (PGN.WA) said that it bought a cargo of liquefied natural gas from the U.S. and sold it to Ukraine.

Reporting by Agnieszka Barteczko; Editing by Alison Williams and Stephen Powell

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