New custom-built LNG carriers to bolster Polish security of supplies

Two newbuild liquefied natural gas (LNG) carriers built for exclusive use by Polish ORLEN Group are being prepared to enter service in early 2023.

The two vessels ordered by PGNiG Supply & Trading, an ORLEN Group company specialising in LNG trading, were named “Lech Kaczyński” and “Grażyna Gęsicka” this month in Ulsan, South Korea.

Both ships were built by Hyundai Heavy Industries in about 18 months each.

The ORLEN Group will use the ships under a long-term charter deal with Knutsen OAS Shipping of Norway, specialising in the maintenance and commercial operation of LNG tankers.

Under the contract, the shipowner will be responsible for manning the chartered vessels and keeping them in good technical condition. At the same time, PGNiG Supply & Trading will have complete commercial control over their operation.

The term of the charter is ten years with an extension option.

Each vessel can carry a cargo of about 70 thousand tonnes of LNG, equivalent to about 100 mcm of regasified natural gas.

One of their features is a very low rate of boil-off losses. What is more, boil-off gas can be reverted to liquid state thanks to onboard reliquefaction systems. The vessels’ engines can run on both diesel oil and natural gas, which will ensure their compliance with environmental standards for maritime transport well into the future, ORLEN said.

The first ship “Lech Kaczyński” has already undergone sea trials and will enter service under the ORLEN colours early next year, while “Grażyna Gęsicka” will deliver its first LNG cargo in the second half of next year.

The vessels will be used to deliver LNG purchased under both long-term contracts and spot contracts on a free-on-board (FOB) basis.

“For energy security of Poland, it is crucial to diversify the supply of oil and natural gas – the latter we already import 100% from outside Russia. This is the result of a consistently implemented LNG import strategy. The shipments of liquefied natural gas already cover almost 30% of our country’s demand. LNG supplies are secured not only by means of contracts but also by developing our own fleet. Custom-built vessels for our exclusive use guarantee the stability of transport and strengthen the company’s position on the global LNG market”, said Daniel Obajtek, CEO of PKN ORLEN.

The two LNG carriers are part of ORLEN’s strategy to build its own fleet of LNG carriers, which will increase to eight units by the end of 2025.