– How much does the US LNG imported to Poland since 2017 cost? The price varies from almost $ 120 to about $ 300 for 1000 cubic meters at the point of its loading. Transport and insurance costs are added to this. These are the numbers given by the US Department of Energy, which allow to have discussions about the price. This confirms the estimates of our portal that LNG from the USA may be competitive compared to deliveries to Poland from Gazprom under the Yamal contract – writes Bartłomiej Sawicki, editor of BiznesAlert.pl.
Asia is the largest buyer of LNG from the USA. Europe imports more and more
Poland has already received seven LNG deliveries from the USA. Only this year there was five of them. This puts Poland in twentieth place on the list of LNG importers with export share at the level of 1,1 percent. In the period from February to 2016 to April 2019, Poland imported approx. 665 million cubic meters of gas from the US after regasification.
The export of LNG from the USA began over three years ago in February 2016. The US Department of Energy revealed in the report that by April 2019 the Americans had sent 747 cargoes to 36 different countries. The total volume from February 2016 to April 2019 amounted to 69,6 billion cubic meters. Spot deliveries accounted for 17,6 percent of the total volume of exports.
The leader is South Korea. The country has already received 133 loads, and its share in LNG imports from the USA is 18,6 percent, with a volume of 12,9 billion cubic meters. Mexico is the second and Japan third. China with whom the US has been dealing with commercial disputes in recent months, is in the fourth place. China received 65 deliveries with volumes reaching 6,2 billion cubic meters and their share in exports in the over three-year period is 9 percent.
Among the European countries, Spain received the most freight (24), which gave it the eighth place. Other European countries ahead of Poland are Turkey, Great Britain, France, Portugal, Italy and the Netherlands. The share of Europe and Central Asia accounts for 19,4 percent of exports. Imports of LNG in Europe this year, however, have increased significantly. Only in April Poland dominated the import of LNG from the USA. The first two of the five largest importers for this month are France (484 million cubic meters) and the Netherlands 368 million cubic meters). In terms of February 2016 to April 2019, however, the largest amount of cargo was sent to Asia and the Pacific – 39,4 percent.
The price of LNG from the USA may be competitive to Gazprom’s offer
The US Department of Energy also indicates the price of the cargo at the time of check-in from a given export point. In the case of deliveries to Poland, the data looks as follows:
|Departure date from the LNG export facility||Exporter name||Carrier||Kind of contract||Destination||Ship name||Departure facility name||Volume in mld cubic meters||Price in export point (dol/MMBtu)||Fee for resource liquification|
|5/22/2017||Sabine Pass Liquefaction||LLC Sabine Pass Liquefaction||Spot||Poland||Clean Ocean||Sabine Pass LNG Terminal||97.4||4.10||Spot delivery|
|11/9/2018||Dominion Energy Cove Point LNG||LP GAIL Global||Long-term||Poland||Hoegh Gallant||Cove Point, Maryland||91.4||6.85||yes|
|1/3/2019||Sabine Pass Liquefaction||LLC Sabine Pass Liquefaction||Long-term||Poland||Hoegh Gallant||Sabine Pass, Louisiana||100.6||8.42||yes|
|1/11/2019||Sabine Pass Liquefaction||LLC Sabine Pass Liquefaction||Long-term||Poland||Iberica Knutsen||Sabine Pass, Louisiana||82||4.19||no|
|1/27/2019||Sabine Pass Liquefaction||LLC Sabine Pass Liquefaction||Long-term||Poland||Flex Rainbow||Sabine Pass, Louisiana||93||7.19||yes|
|3/19/2019||Sabine Pass Liquefaction||LLC Sabine Pass Liquefaction||Long-term||Poland||Gaslog Hong Kong||Sabine Pass, Louisiana||104.7||3.28||no|
|4/30/2019||Dominion Energy Cove Point LNG||LP ST Cove Point LLC||Long-term||Poland||Maran Gas Sparta||Cove Point, Maryland||96.6||7.49||yes|
It is not apparent from the department’s data that the amounts in question also concern insurance and transmission costs. These costs are usually around $ 20 for 1000 cubic meters in case of delivery to Europe. It is worth recalling that on November 8 last year PGNiG signed a long-term agreement for the purchase of liquefied natural gas from the USA from 2019 with Cheniere Marketing International LLP. During a visit to Houston, US energy secretary Rick Perry announced that the next LNG delivery from the USA will reach Poland in a few weeks. This will most probably be a cargo for PGNiG contracted with Cheniere Energy.
In 2019-2022, the total volume of supplies will amount to approximately 0,52 million tonnes of LNG, or approximately 0.7 billion cubic meters. gas after regasification. However, in the years 2023-2042, the total import volume will reach approx. 29 million tonnes (approximately 39 billion m after re-gasification) – which means that from 2023, PGNiG will purchase about 1,45 million tonnes of LNG from this company each year (approx. 1,95 billion cubic meters of gas after regasification). Deliveries will be carried out with the DES (delivery ex-ship) formula – that is, the supplier takes responsibility for delivery to Świnoujście.
In terms of cubic meters, the price of gas, which in 2019 came from the USA to Poland, is respectively in the case of subsequent loads from the first to the fifth, approximately 303 dollars, 151 dollars, 259 dollars, 118 dollars, 270 dollars for 1000 cubic meters. In the case of a spot delivery from 2017, it was about $ 147 for 1000 cubic meters, and in 2018 – 246 dollars. For comparison, the price of gas under the Yamal contract still in the years 2013 – 2014 was between 300 and 400 dollars. According to the Interfax agency in 2015, Poland paid PLN 429 in 2013 and a year later for USD 379. Currently, thanks to the lower price of oil to which this contract is indexed, the acquisition costs have dropped to approx. USD 300.
Trump dropped the trail
During a press conference in front of the White House with the participation of the President of the Republic of Poland Andrzej Duda, he said that in recent years Poland has signed 25 billion USD agreements with American companies, ordering over 6 billion cubic meters of American LNG. On the same day, PGNiG and Venture Global LNG signed another contract that was annex to the previously signed contract for deliveries of 2 billion cubic meters within 20 years for 8 billion dollars. This was the reason for calculations allowing to conclude that LNG from the USA may actually be cheaper than the current Russian supplies.
Similar costs may appear in the case of agreements signed by PGNiG in 2018. The following graphic shows the volume of implemented and planned LNG deliveries. Two billion cubic meters were added to these calculations. bought as part of the annex to the contract with Venture Global LNG from last week. The contract includes the Free on Board formula. Under this agreement, PGNiG will independently decide on the direction in which the delivery will take place, but takes responsibility for the transport.
So far, since 2017, each LNG cargo from the USA has been competitive or on the verge of competitiveness with respect to gas supplies from Russian Gazprom under the Yamal contract expiring at the end of 2022. The data shown by the American department are coincident with the declarations of Piotr Woźniak, the president of PGNiG, who repeatedly emphasized that LNG from the USA may be competitively priced compared to the contract with Gazprom. Gas imports from the East to Poland fell from 9,6 billion cubic meters in 2017 up to approx. 9 billion cubic meters in 2018 with a simultaneous increase in LNG imports by 20 per cent. This trend is likely to be maintained by growing LNG imports from the US and other destinations.