Poland and US sign energy cooperation deal

Poland’s Energy Minister Krzysztof Tchórzewski and US Energy Secretary Rick Perry recently signed a deal in Warsaw on natural gas supplies, development of nuclear energy and cyber security support and follows a declaration on strategic partnership signed by the two countries’ presidents in Washington in September.

Poland’s state-run gas company PGNiG then signed a long-term contract to buy liquefied natural gas (LNG) from the US as part of efforts to reduce the country’s dependence on Russian deliveries. PGNiG signed a five-year deal to import LNG from the US in November 2017. The agreement is between PGNiG and Centrica LNG is for shipments between 2018 and 2022.

Poland opened an LNG receiving terminal on the Baltic Sea in 2017, and the state-owned oil and gas firm PGNiG received its first LNG shipment from the US last June as part of a spot-market deal, shortly before Trump visited the nation.

Nord Stream 2

Germany also faces the challenge of how to secure stable energy sources and one of the options has been an extension to the Nord Stream gas pipeline from Russia, so-called Nord Stream 2.

The pipeline would double Russian gas exports but has faced opposition from the US, Poland and Lithuania and some in Germany.

US to the rescue

The simultaneous boom in US, mainly shale gas, has also created a new source of cheap global supply that is changing energy consumption habits globally. By the end of the decade the US is expected to have five major LNG export projects operational, becoming the third largest LNG exporter after Qatar and Australia.

Russia’s gas exports to Europe rose 8.1% in 2017 to a record 193.9 billion cubic meters (bcm), with Gazprom holding an effective monopoly over Russia’s network of pipelines to Europe, supplying 40 percent of Europe’s gas. Mr. Perry has said moving US energy supplies into Central and Southeast Europe is one a way of containing Russian influence.

Meanwhile, Kurt Volker, the US special representative for Ukraine, has said the Donald Trump administration is weighing sanctions on European corporations working with Russia. The targeted companies — ENGIE, OMV, Royal Dutch Shell, Uniper and Wintershall — have agreed to lend Gazprom USD950m for construction of Nord Stream 2 and have extended the repayment period until 2035.

European Commission President Jean-Claude Juncker pledged the EU would build more terminals to import the US LNG.

Share this post