[Context: On October 17, Venture Global LNG, which is backed by undisclosed private equity sponsors, announced an LNG sales and purchase agreement for 2 million tons per yea with Polish Oil and Gas Company. Further details and related links are below.]
PGNiG and Venture Global LNG Announce LNG Sales and Purchase Agreements for 2 Million Tonnes Per Year
WARSAW, Poland, Oct. 17, 2018 /CNW/ — For a 20-year term, Polish Oil and Gas Company (PGNiG) will receive liquefied natural gas from the USA for domestic customers or for resale. Under the agreements, PGNiG will purchase LNG on a free on board (FOB) basis starting from the commercial operation date of the Venture Global Calcasieu Pass LNG export facility, currently expected in 2022, and the commercial operation date of the Venture Global Plaquemines LNG export facility, currently expected in 2023.
The binding contracts were signed between Polish Oil and Gas Company (PGNiG) and two subsidiaries of Venture Global LNG – Venture Global Calcasieu Pass, LLC and Venture Global Plaquemines LNG, LLC. Both contracts are the result of an agreement concluded in June 2018 with Venture Global LNG.
“Recently signed contracts are a milestone towards building PGNiG’s position in the global liquefied natural gas market,” said Piotr Wo?niak, President of the PGNiG Management Board. “Thanks to the FOB formula, we will be able to decide, independently and based on our needs at a given time, whether the purchased LNG load should be directed to Poland or be used for further trading through our London office,” added President Wo?niak.
“The contract conditions in the USA are very attractive. The LNG price is based on the American Henry Hub index along with liquefaction costs,” stated Maciej Wo?niak, Vice-President of the PGNiG Management Board for Trade. “These are the first long-term contracts for purchase of LNG from the US announced in Central Europe,” he underscored.
Mike Sabel and Bob Pender, co-CEOs of Venture Global LNG, jointly announced: “We are honoured to become a partner of both Poland and of PGNiG, one of Europe’s most important international oil and gas companies. We are greatly looking forward to developing a long-term supply relationship with PGNiG, who will be joining our existing, high quality partners: Shell, Edison SpA, Galp, BP and Repsol.”
The new contracts will provide a total of 2 MTPA of LNG, which is approximately 2.7 billion m³ of natural gas after regasification, and this equals – depending on the vessel capacity – over 25 cargoes a year. For a term of 20 years, PGNiG will purchase from each of the companies 1 MTPA of LNG every year on a FOB (free on board) basis, where the seller will deliver LNG to a tanker ship at the loading port and the purchaser will freely dispose of the load, including deciding on the cargo destination.
Polish Oil and Gas Company (PGNiG) is the leader of the Polish natural gas market. Listed on the Warsaw Stock Exchange the company’s core business includes exploration and production of natural gas and crude oil. Its key subsidiaries import, store, sell and distribute gaseous and liquid fuels. They also generate heat and electricity. PGNiG holds stake in about 30 companies including entities that provide professional geophysical, drilling and maintenance services. PGNiG holds exploration and production licenses on the Norwegian Continental Shelf and in Pakistan. The exploration and production activity in Norway is carried out by PGNiG Upstream Norway. While Munich-based PGNiG Supply & Trading is engaged in gas trading in Western Europe, also operating the LNG trading office in London.
About Venture Global LNG
Venture Global LNG is a long-term, low-cost provider of LNG to be supplied from resource rich, low cost, North American natural gas basins. Venture Global LNG’s liquefaction process system will employ a highly efficient and reliable suite of products supplied by GE Oil & Gas, LLC, part of Baker Hughes, a GE company (BHGE). Venture Global LNG is developing both the 10 MTPA Venture Global Calcasieu Pass facility (on an approximately 1,000-acre site located at the intersection of the Calcasieu Ship Channel and the Gulf of Mexico) and the 20 MTPA Venture Global Plaquemines LNG facility (on an approximately 630-acre site in Plaquemines Parish, Louisiana, 30 miles south of New Orleans on the Mississippi River). Venture Global has raised $630 million of capital to-date to support the development of its projects.