PGNiG to move away from Russian gas

PGNiG’s Chairman, Piotr Woźniak, said the new agreement would help the Polish gas company rely on many sources of liquefied gas and would make PGNiG a major centerpiece in the global gas market. Dominik Gajda

Poland's national gas company, PGNiG, has signed a new long-term agreement with US companies – a move that will make Poland much less dependent on Russian gas.

According to PGNiG, the company has signed agreements with Port Arthur LNG and Global LNG, in which each company will supply 2 million tonnes of liquid gas to Poland for 20 years starting in 2022. 

The agreement is another step in Poland's strategy to disengage almost completely from the Russian gas supply after the dispute between the two countries around gas prices. Poland claims Russia was charging excessive prices for the gas it supplies to the Baltic states, and the dispute reached international arbitration. The agreement between PGNiG and Russia’s state-run gas company Gazprom is scheduled to end in 2022 and PGNiG does not intend to extend the contract.

"Under the agreement, the parties will negotiate the provisions of the binding 20-year contract for the purchase of 2 million tonnes of LNG annually, which corresponds to the total volume of approximately 2.7 bcm of natural gas after regasification. The deliveries may be further traded by the Company on international markets and will be made on a free-on-board basis. PGNiG believes the agreed terms and conditions of the agreement, including the competitive price of LNG, are satisfactory in the context of the PGNiG Group's LNG global trading strategy,” said the announcement. 

The two US companies are considered to be major gas suppliers and are currently involved in the construction of gas liquefaction terminals on the Gulf of Mexico coast. The agreement is due to enter into force in 2022, after the completion of the gas liquefaction terminals.

PGNiG’s Chairman, Piotr Woźniak, said the new agreement would help the Polish gas company rely on many sources of liquefied gas and would make PGNiG a major centerpiece in the global gas market.

 “This is the company's strategy to replace gas supplies from Russia. Purchasing of liquefied natural gas in the USA will not only allow further diversification of our import portfolio following 2022, but will also let us develop our trading competences and enable PGNiG's presence as a global LNG market player,” said Wozniak.

As part of the attempt to disengage from the Russian gas, PGNiG also signed in November 2017 an agreement with the UK gas company, Centrica LNG, for nine deliveries of gas supply between 2018 and 2022.