Poland signs deal for long-term deliveries of US gas

Poland's President Andrzej Duda, left, and U.S. Energy Secretary Rick Perry, right, shake hands during a ceremony in which Poland's main gas company PGNiG signed a long-term deal for liquefied gas deliveries with the U.S. firm Chenier, in Warsaw, Poland, Thursday, Nov. 8, 2018. (AP Photo/Czarek Sokolowski)

WARSAW, Poland (AP) — Poland’s main gas company signed a long-term contract Thursday to receive deliveries of liquefied natural gas from the United States as part of a larger effort to reduce its energy dependence on Russia.

The state company PGNiG signed the 24-year deal with American supplier Cheniere during a ceremony in Warsaw attended by U.S. Energy Secretary Rick Perry and Polish President Andrzej Duda.

“This is a sign across Europe that this is how your energy security will be developed, your energy sources diversified,” Perry said before the deal was signed.

Perry is visiting several countries of central and eastern Europe to expand on energy partnerships in the region, the Department of Energy said.

The value of the deal with the Polish company was not disclosed, in line with traditional secrecy for such energy deals.

However, Piotr Wozniak, the president of PGNiG’s management board, said the price is 20-30 percent lower than what Poland pays its current supplier in Russia.

Under the deal, Poland will receive some 700 million cubic meters of gas from 2019 through 2022, and 39 billion cubic meters from 2023 through 2042. Poland’s annual consumption of gas is almost 16 billion cubic meters, 25 percent of which is covered from Poland’s own deposits.

Wozniak said the deal would also provide a safety net to protect neighboring Ukraine from unexpected breaks in Russian gas deliveries. PGNiG is planning two more deals for U.S. gas deliveries, he said.

Poland and Ukraine feel especially vulnerable due to their dependence on Russia energy supplies, which Moscow has used as political leverage in the past.

Their anxieties have increased because of a German-Russian project to build Nord Stream 2, a second pipeline under the Baltic Sea that would deliver gas directly from St. Petersburg to Germany, bypassing Ukraine and Poland.

Polish ruling party leader Jaroslaw Kaczynski sent a message that was read out saying he was “happy that the deal will increase Poland’s energy security.”

Deliveries of liquefied natural gas will begin in 2019 but will not reach full volume for several years, PGNiG said.

The gas will be delivered by ship from terminals in Louisiana and Texas to a liquefied natural gas terminal in Swinoujscie, in the northwest, on Poland’s Baltic coast.

In October, PGNiG signed a separate long-term contract for the purchase of some 40 million tons, or over 50 billion cubic meters, of liquefied natural gas from Louisiana-based Venture Global Calcasieu Pass and Venture Global Plaquemines LNG.

That was to replace a deal expiring with Russia’s Gazprom and was the first such deal in central and eastern Europe.

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Vanessa Gera in Warsaw contributed to this report.

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