Poland’s largest oil and gas producer, state run PGNiG, has contracted additional supplies of liquefied natural gas for the country in a drive to decrease its dependence on deliveries of Russian pipeline gas by Gazprom.
PGNiG said that US-based Venture Global LNG will ship 2 million tonnes per annum of LNG to Poland's sole import regasification terminal in Swinoujscie on the Baltic Sea.
The arrangement expands the scope of the existing 20-year contract between PGNiG and Venture Global, signed in 2018, to the total annual supply of 5.5 million tonnes of LNG, or about 7.4 billion cubic metres of gas.
State monopoly Gazprom's dependence on Poland as a transit country for gas flowing to Germany is expected to be diminished with the anticipated commissioning of Nord Stream 2, the Russian subsea gas export pipeline across the Baltic Sea to Germany, later this year.
While the time frame of a widely anticipated decline in supplies of Russian gas to Poland and the halt in gas transit flows is unclear, the contract with PGNiG presents the company with a choice to sell LNG cargoes, nominated by Venture Global, elsewhere on the European market if they are not needed at home.
PGNiG imported 8.3 Bcm of gas to Poland during the first half of 2021 against 7.5 Bcm in the same period of the last year, with Russian gas pipeline deliveries accounting for 61% and LNG imports for 30% of the total volume of imports.
Besides Global Venture, which is set to begin deliveries in 2023, PGNiG has running LNG supply contracts with Qatargas, the US's Cheniere and the UK's Centrica.
PGNiG revenue boost
According to its latest consolidated financial report, PGNiG boosted revenues by 19% to almost 25 billion zloty ($6.6 billion) in the first half of this year, compared with the same period of 2020, due to higher gas sales.
The increase in sales has been driven by economic recovery during the second quarter and, before that, the a cold winter.
Net income fell to 2.4 billion zloty for the period between January and June, compared with 5.9 billion zloty a year earlier, but the 2020 result was boosted by a one-off gain, recognised as such by PGNiG.
The gain was recorded to reflect the payment of 5.7 billion zloty from Gazprom to PGNiG as part of the retroactive downward revision of Russian gas sale prices for the period between 2014 and 2020.