Poland’s PGNiG inks 5-year deal with Centrica to buy US LNG

Poland’s state-owned gas company PGNiG has signed a five-year contract with British utility Centrica to buy liquefied natural gas (LNG) sourced from Cheniere’s Sabine Pass liquefaction plant in the US.

The LNG will be delivered on a DES (delivered ex-ship) basis and the supplies will start in 2018.

Up to 9 cargoes will be delivered during the term of the contract to the President Lech Kaczyński LNG terminal, Poland’s first import facility located in Świnoujście, where PGNiG recently booked additional regasification capacity, PGNiG said in a statement.

This is the first medium-term LNG agreement signed by PGNiG Supply & Trading’s branch office located in London, which is dedicated to global LNG trading.

It is also the first mid-term contract for LNG supplies from the US to Central and Eastern Europe, according to PGNiG.

“Preceded by the long-term contract for LNG deliveries from Qatar and several spot deliveries in 2017, this agreement shows that we are stepping into a new level of global LNG market activity. This five-year agreement for American LNG deliveries is based on gas market conditions,” said Piotr Woźniak, CEO and President of the Management Board of PGNiG.

“This agreement is the first of its kind in PGNiG’s planned portfolio of medium-term LNG agreements. Most of these LNG supply agreements will be dedicated to the gas markets of Poland and other Central European countries in order to increase the energy security of this region, which has historically been dominated by Russian gas,” said Woźniak.

To remind, PGNiG has earlier this year received its first US spot delivery of LNG from Cheniere.

PGNiG is in charge of all the LNG supplies coming to the import terminal in Świnoujście operated by Gaz-System’s unit Polskie LNG.