Oil and Gas

Poland's PGNiG signs long-term LNG deal with Cheniere

WARSAW, Nov 8 (Reuters) - Polish state-run gas firm PGNiG has signed a long-term deal with Cheniere Marketing International to secure liquefied natural gas (LNG) supplies from the United States, it said on Thursday, as Poland seeks to cut dependence on Russian fuel.

Poland consumes around 17 billion cubic metres of gas annually, more than half of which comes from Russia’s Gazprom under a long-term deal that expires in 2022.

PGNiG has previously said it does not intend to extend the agreement, and has taken steps to secure supplies elsewhere after that date.

Under the terms of the new deal PGNiG will receive a total of 0.52 million tonnes of LNG in the period 2019-2022 and 29 million tonnes in 2023-2042, to be delivered to an LNG terminal in the Baltic Sea, the company said.

After regasification, this corresponds to 0.7 bcm of gas by 2022 and 39 bcm in 2023-2042. Starting from 2023 PGNiG will be receiving 1.45 mln tonnes of LNG, or 1.95 bcm of gas, annually under the deal.

“The price is much lower than the one we have in the contract with Gazprom,” PGNiG Chief Executive Piotr Wozniak told a press conference.

The price Poland pays for U.S. gas is 20-30 percent lower than for Russian supply, he reiterated.

“This is a signal across Europe that this is how your energy security can be developed, the security of your country, the diversity of supply,” U.S. Energy Secretary Rick Perry, who is visiting Poland on Thursday, said at a joint press conference with PGNiG.

In October PGNiG finalised the terms of a deal to buy LNG from U.S. company Venture Global LNG, and a year ago it signed an agreement with UK firm Centrica LNG Co Ltd for nine LNG shipments in 2018-2022.

Poland also plans to build a gas pipeline to Norway via the Baltic Sea and Denmark to allow it to receive up to 10 bcm of gas annually from deposits under the North Sea.

Polish officials have repeatedly said that Warsaw pays too much for Gazprom’s gas and have opposed a Russian plan to build a new gas pipeline across the Baltic Sea, saying it is aimed at strengthening its dominant market position in the region. (Reporting by Agnieszka Barteczko and Anna Koper; Editing by Jan Harvey)