U.S-based Sempra Infrastructure said Wednesday it signed a long-term agreement to deliver much-needed liquefied natural gas to Poland from an export facility planned for Texas.
Sempra signed a 20-year sale and purchase agreement with PKN ORLEN, recently acquired by Polish Oil & Gas Co., known commonly by its Polish-language initials PGNiG. From the first phase of its planned LNG export facility in Port Arthur, Texas, Sempra committed to the delivery of the equivalent of 48.7 billion cubic feet of gas in the liquid form to the Polish firm.
With the agreement, Sempra said the entire capacity from the first phase of operations is covered under binding, long-term agreements.
Daniel Obajtek, the CEO of PKN ORLEN, said this is an example of how U.S. suppliers are supporting energy security in Europe.
"Already last year, during a very tense situation on the EU energy market, the United States became one of the main suppliers of natural gas to Poland," he said. "By establishing a partnership with Sempra Infrastructure, we are increasing the diversification of our import portfolio and we are securing additional volumes of natural gas, which will be used both to provide for the needs of the Polish customers and to enhance PKN ORLEN's presence in the international energy market."
Poland before the outbreak of war in Ukraine was almost entirely dependent on Russia for its supplies of natural gas. Western-backed sanctions and an aversion to padding the Kremlin's war chest has sidelined much of Russian supplies, leaving it to gas-rich countries such as Australia, Qatar and the United States to take up the slack.
Germany too was once heavily dependent on Russia, sitting at the terminal end of the Nord Stream natural gas network in the Baltic Sea. Sempra has a long-term agreement with German energy company RWE to supply above 15% of the nameplate capacity from Phase 1 at Port Arthur under a 15-year agreement.
Sempra has proposed a facility that would have two units -- called trains -- that cool natural gas enough so it turns to liquid, making it easier to export. The first phase of the project would have a design capacity of 13.5 million tons of LNG per year.
With agreements in hand, Sempra CEO Justin Bird said the company can move forward with plans for a final investment decision at Port Arthur that paves the way to the start of construction.
"With the long-term off-take capacity for Phase 1 now sold under binding agreements, we expect to reach FID later this quarter and commence construction on the Port Arthur LNG Phase 1 project to help meet the increasing demand for LNG across Europe and the rest of the world," he said.