Poland's PGNiG secures LNG supply from U.S. firm Sempra

[May 16, 2022]  (Reuters) -U.S. energy firm Sempra Energy said on Monday it would sell three million tonnes of liquefied natural gas (LNG) each year to Poland's PGNiG, in another sign of rising interest in U.S. supply following Russia's invasion of Ukraine.

Buyers wary of importing natural gas from sanctions-hit Russia have been turning to U.S. LNG in recent months as the war in Ukraine tightens an already under-supplied market.

The United States this year is expected to surpass Australia and Qatar as the world's largest LNG exporter, delivering more than 12.2 billion cubic feet per day.

Sempra will provide PGNiG (Polish Oil & Gas) with LNG for 20 years under the deal.

About two million tonnes of LNG per annum will come from Sempra's Cameron LNG Phase 2 project in Louisiana, while the rest would come from the Port Arthur LNG project in Texas.

PGNiG will also have the option in 2022 to reallocate volumes from the Cameron Phase 2 project to the Port Arthur project, Sempra said in a statement.

PGNiG said the agreement opens the way to negotiate terms of a future contract for supply starting in 2027 on a free-on-board basis.

 Sempra Energy headquarters is pictured in downtown San Diego, California, U.S., May 17, 2018. REUTERS/Mike Blake/File Photo

The volumes will be received via a floating storage and regasification unit which Poland plans to operate on the Baltic Sea near Gdansk.

LNG is one of the pillars of Polish plans to boost its energy security as it seeks full independence from Russian gas supplier Gazprom.

Gazprom halted shipments to Poland last month after Warsaw refused to switch to payment in roubles.

"We are determined to continue marching in this direction, that's why we are acting to make sure we have access to adequate volumes of gas in the future," PGNiG CEO Iwona Waksmundzka-Olejniczak said in a statement on Monday.

PGNiG's LNG supply portfolio with U.S. partners currently stands at 7 million tons or 9 billion cubic metres (bcm) after regasification.

A contract with Sempra would boost that by more than 40%. Poland consumes about 20 bcm of gas annually.

(Reporting by Arunima Kumar in Bengaluru and Marek Strzelecki in Warsaw; editing by Aditya Soni and Jason Neely)

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