Poland signs 20-year LNG agreement with Qatargas

Eric Watkins
OGJ Oil Diplomacy Editor

LOS ANGELES, Apr. 16 -- Poland's state-owned Polskie Gornictwo Naftowe i Gazownictwo (PGNIG), seeking to diversify the country's sources of supply, has signed a long-term LNG purchase contract with Qatargas.

Qatargas will supply Poland with 1 million tonnes/year of LNG for 20 years starting in 2014.

The shipments, to be carried by Qatar's Q-Flex ships to a deepwater terminal under construction at Swinoujscie, will provide some 1.4 billion cu m/year of gas or roughly 6% of Poland's forecast gas demand in 2014.

The agreement follows a meeting last November Poland's Prime Minister Donald Tusk and Qatar's ruler, Emir Sheikh Hamad bin Khalifa al-Thani, to begin official discussions for the LNG contract.

In March the Polish government passed legislation to speed construction of the Swinousjcie LNG terminal in northwestern Poland. The law is designed to make the construction of the terminal "simpler and quicker."

The Swinousjcie terminal, which is expected to be operational by yearend 2013 or early 2014, will have an initial import capacity of 2.5 billion cu m/year, eventually rising to 7.5 billion cu m/year.

During his meeting with the Qatari leader, Tusk said that gas could be delivered to Zeebrugge if construction of the Swinousjcie terminal is delayed beyond 2014.

In January 2008 PGNIG finalized a contract with SNC-Lavalin for design of the first phase of the Swinousjcie regasification plant, while in June 2008 Foster Wheeler said its Spanish subsidiary was set to start work on the terminal's front-end engineering and design phase.

PGNIG currently has a 3-year gas import agreement with RosUkrEnergo, the Russian-Ukrainian gas supplier owned jointly by Russia's gas monopoly OAO Gazprom and Ukraine's Centragas Holding.

The agreement, signed in November 2006 and due to expire at yearend, calls for RosUkrEnergo to supply Poland with 2.3 billion cu m/year of gas. However, since the Russia-Ukraine gas dispute earlier this year, Poland has been especially keen to reduce its dependence on RosUkrEnergo and on Russia generally.

According to PGNIG Chairman Michal Szubski, LNG supplies are "one of the keys" to a diversified gas portfolio in Poland, which meets 30% of its gas needs from its own resources, 40% from Russian imports, and the remaining 30% from other sources.

Contact Eric Watkins at hippalus@yahoo.com.

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