Polish Oil and Gas (PGNiG) has signed agreements with two subsidiaries of Venture Global LNG – Venture Global Calcasieu Pass and Venture Global Plaquemines LNG – under which PGNiG will receive LNG from the US for 20 years for domestic customers or for resale.
Image: PGNiG, Venture Global sign LNG sales and purchase agreements. Photo courtesy of PinkBlue/FreeDigitalPhotos.net.
PGNiG will purchase LNG on a free on board (FOB) basis from the commercial operation date of the Venture Global Calcasieu Pass LNG export facility, expected in 2022, and the commercial operation date of the Venture Global Plaquemines LNG export facility, expected in 2023.
Both contracts are the result of an agreement with Venture Global LNG in June 2018.
PGNiG management board president Piotr Woźniak said: “Recently signed contracts are a milestone towards building PGNiG’s position in the global liquefied natural gas market.
“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.”
Under the new contracts, 2mtpa of LNG will be supplied, which will be approximately 2.7 billion m³ of natural gas after regasification.
For a 20-year term, PGNiG will purchase from each of the companies 1mtpa of LNG every year on an FOB basis. The seller will deliver LNG to a tanker ship at the loading port and the purchaser will dispose of the load, including deciding on the cargo destination.
Venture Global Calcasieu Pass is developing the LNG export facility in Cameron Parish, Louisiana. The 930-acre project site is located on the Calcasieu Ship Channel, featuring deep-water access, proximity to gas supplies and ease of transport for buyers.
The project is expected to create 1,500 jobs at peak construction, and 130 long-term, direct jobs.
The project site is secured under exclusive agreements for a 70-year term.
PGNiG vice-president of management board for trade Maciej Woźniak 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.
“These are the first long-term contracts for purchase of LNG from the US announced in Central Europe.”