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Qatar Signs Deal to Boost LNG Sales to Poland

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Poland will ramp up imports of Qatari LNG as part of its strategy to reduce its dependence on Russia's Gazprom by diversifying its sources of gas supplies over the next 10 years (LNGI Mar.23'16). According to the terms of an add-on deal to an existing sales and purchase agreement (SPA) announced Tuesday, Qatargas will supply as much as 2 million tons per year of LNG to state-owned Polish Oil and Gas (PGNIG) from January 2018 until 2034, Qatargas said in a statement. The existing SPA with PGNIG, which came into force in 2014 for a period of 20 years, called for the import of roughly 1 million tons/yr of LNG from Qatargas. The LNG will be supplied from Qatargas 3, a joint venture between state Qatar Petroleum, ConocoPhillips and Mitsui. Delivered on Q-Flex LNG vessels, the super-cooled fuel will dock at Poland's LNG terminal in Swinoujscie, the largest in the Baltic Sea, which started operations in June last year (LNGI Jun.20'16). Poland, like most of Europe, relies heavily on gas imports from Russia to meet domestic energy needs, with the bulk of supplies being delivered by Gazprom, which currently boasts an approximately 80% share in the country's 15 billion cubic meter per year gas market. Poland has made it clear that it does not intend to renew the existing, 10-year supply agreement with Gazprom that expires in 2022. In addition to Qatari LNG, the Swinoujscie terminal is also offtaking Norwegian cargoes and Poland has been pushing new pipeline connections with Europe to break Russia's grip on supplies (LNGI Jun.28'16; LNGI Jan.23'17). The increase of volumes under the agreement with Qatargas "contributes to the realization of the long-term goals of both companies and supports the implementation of our strategy to diversify natural gas supplies to Central and Eastern Europe," PGNIG Chief Executive Piotr Wozniak said in Tuesday’s statement. Energy Intelligence

Topics:
Gas Demand, Gas Supply
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