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PGNIG Firms Additional LNG From Venture Global

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Poland’s PGNIG has agreed to import an additional 2 million tons of LNG from US developer Venture Global, amending an existing sales and purchase agreement between the two companies. The country is having to manage its natural gas and LNG import portfolio carefully as it replaces supplies from a long-term supply contract with Russia’s Gazprom expiring at the end of 2022, which it will not renew. The signing was confirmation of a heads of agreement clinched in July, bringing the contracted total to 5.5 million tons of LNG for 20 years on an f.o.b. basis starting in 2023 (LNGI Jul.27'21). When regasified the deal will be equivalent to 7.4 billion cubic meters of natural gas, roughly equivalent of a third of Poland’s forecast demand. Polish grid operator Gaz-System’s moderate demand forecasts estimate Polish gas consumption will be 19.6 Bcm in 2023. Poland’s Deputy Prime Minister Jacek Sasin, who was present at the signing, said it was a “historic agreement,” which along with PGNIG’s other import deals made him “optimistic for the future” of being completely diversified away from Russian gas supplies. Supplies Start in 2023 PGNIG will now receive 1.5 million tons per year of LNG from the Calcasieu Pass terminal, which is still under construction and expected to start commercial deliveries by early 2023. The Polish company will also get 4 million tons/yr of LNG from the yet-to-be sanctioned Plaquemines terminal, planned for a 2024 start (LNGI Apr.30'21). As it stands, on top of the 7.4 Bcm/yr from Venture Global, PGNIG is planning to receive 1.9 Bcm/yr of gas through an LNG contract with Cheniere as well as 2.7 Bcm/yr from a deal with Qatargas. It also plans to import some 8.3 Bcm/yr of piped gas from its own gas fields offshore Norway through the 10 Bcm/yr Baltic Pipe. Any additional demand will be covered by spot LNG procurement and piped interconnections with its European neighbors. Construction of the Baltic Pipe, which traverses Denmark, has been delayed by three months after its Danish environmental permit was revoked (LNGI Jun.21'21). The original start date of October 2022 will not be met, even though Danish operator Energinet says that some gas will be able to be shipped to Poland through the existing Danish network. H1 LNG Imports Fall 14% PGNIG imported 18 LNG cargoes transporting 1.47 million tons of the superchilled fuel in the first half of the year, compared to 21 cargoes and 1.58 million tons in the same period last year. The company’s Trade and Storage unit sold 18.18 Bcm of natural gas in the first half, an 8% rise year on year, boosted by colder winter temperatures driving gas consumption and an economic recovery in the second quarter of 2021. Domestic gas production rose 7% during the same period to 2.34 Bcm. The state firm’s first-half revenues rose by 19% year on year to around 25 billion zloty ($6.6 billion) on the strong gas sales. But its earnings before interest, taxation, depreciation and amortization (Ebitda) fell by 44% to 5.2 billion zloty, affected by a higher cost of gas and in contrast with the $1.5 billion in retroactive payments received last year from Gazprom after an arbitration ruling in PGNIG’s favor. Jaime Concha, Copenhagen

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