Sempra in 20-year LNG supply deal with Poland’s PGNiG

US energy company and LNG operator Sempra Energy said on Wednesday it had signed a 20-year definitive agreement with Poland’s state-run gas firm PGNiG to supply liquefied natural gas (LNG) from its Port Arthur LNG export facility under development in Texas.  

While financial terms were not disclosed, the agreement is for the sale and purchase of 2 million tonnes per year, or about 2.7 billion cubic meters per year after regasification – enough natural gas to meet about 15 percent of Poland’s daily needs.

The agreement is subject to certain conditions precedent, including Port Arthur LNG making a final investment decision.

This deal follows heads of agreement signed between Port Arthur LNG and PGNiG back in June.

Under today’s agreement, LNG purchases from Port Arthur LNG will be made on a Free-On-Board basis, with PGNiG responsible for shipping the LNG from the Port Arthur terminal to the final destination.

Port Arthur LNG will manage gas pipeline transportation, liquefaction processing and cargo loading, giving PGNiG flexibility in cargo management.

PGNiG plans to deliver cargos to domestic customers in Poland or trade LNG on the global market, once operations commence.

“This agreement with PGNiG represents an important expansion of our portfolio of contracts for LNG exports and major step forward in the development of our Port Arthur LNG project,” said Jeffrey W. Martin, chairman and CEO of Sempra Energy.

“Our activities show that we consistently implement our strategy,” said Piotr Woźniak, president of the management board of PGNiG.

“Another long-term contract not only allows us to develop LNG portfolio with a view to delivering to Poland, but it gives us, in the near future, the possibility of trading in LNG purchased on a global scale,” he said.

The Port Arthur facility is proposed to include two natural gas liquefaction trains capable of processing approximately 11 Mtpa of LNG; up to three LNG storage tanks; two marine berths, and associated facilities.

The facility is scheduled to receive its final environmental impact statement from the Federal Energy Regulatory Commission next month.

Earlier this year, Bechtel was selected by Port Arthur LNG to serve as the engineering, procurement, construction and commissioning contractor for the facility, subject to reaching a definitive agreement.

LNG World News Staff