Polish PGNiG ends LNG deal over U.S. Texas Port Arthur delays

A trafic is seen in front of the PGNiG Termika Zeran thermal power station after sunset in Warsaw, Poland June 19, 2019. Picture taken June 19, 2019. REUTERS/Kacper Pempel/File Photo

WARSAW, July 27 (Reuters) - PGNiG (PGN.WA) has terminated a deal with U.S. firm Sempra Energy (SRE.N) for liquefied natural gas (LNG) supplies from the Texas Port Arthur project due to delays, Poland's biggest gas company said on Tuesday.

State-run PGNiG signed a 20-year agreement with Sempra in 2018, as part of its bigger plan to cut reliance on gas imports from Russia. PGNiG was to receive around 2 million tonnes of LNG per year under the deal, starting from 2023.

Sempra said in May it would probably move its planned final investment decision (FID) on the Port Arthur LNG export plant in Texas from 2021 to 2022. read more

"The decision was made due to delays in the project's development," PGNiG said in a statement.

PGNiG also signed a memorandum with Sempra under which it could potentially receive the volumes originally contracted at Port Arthur from other Sempra facilities.

The Polish company said it signed agreements to increase LNG purchases from U.S. company Venture Global LNG by 2 million tonnes a year to 5.5 million tonnes.

Under Poland's ruling Law and Justice (PiS) party, Warsaw has deepened its energy cooperation with the United States. It agreed to buy more U.S. LNG and also hopes the United States will help it build and finance its first nuclear power plant.

But PiS relations with Washington have weakened since Joe Biden won the U.S. presidential election.

Poland opposed the waiver of U.S. sanctions on the company behind Russia's Nord Stream 2 and condemned a U.S. deal with Germany over the project. Under that deal between Washington and Berlin, Russia would face penalty costs if Moscow used the new pipeline to harm Ukraine or other eastern European countries.

Reporting by Agnieszka Barteczko; Editing by Edmund Blair

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