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Energy 20 June, 2017 9:00 am   

US LNG in Poland a signal for the sector

“On June 8 2017, the first LNG delivery from the US company Cheniere Energy was received at the LNG terminal in Świnoujście, This was a hugely important event from the point of view of creating a diversified structure of gas supply in Poland. Its significance is even greater, as it is the first delivery of US gas to Central and Eastern Europe,” writes Przemysław Zaleski, PhD., Senior Fellow at the Economy and Energy Program at the Casimir Pulaski Foundation.

So far the Polish LNG terminal received over a dozen deliveries from Qatar’s QATARGAS. Opening to deliveries from another world region strengthens Poland’s position as a serious trade partner in the energy sector. More importantly, the transaction was completed by PGNiG’s trade office in London, which is following the example of international concerns in becoming the Polish company’s trading office.

The delivery of American gas is a strong signal to the petrochemical industry in the USA. It shows that Poland has a ready-to-use gas infrastructure, and can become an entrance point for supplies for the entire region as an operational gas hub. This is a huge opportunity for, both PGNiG, the gas transmission system operator Gaz-System and the Polish Power Exchange (TGE), which can become an entity that determines gas prices and offers a comfortable infrastructure in the form of a gas trading platform for CEE countries. The statement made by Igor Prokopiv, Ukraine’s Deputy Minister of Energy and Coal Industry, for one of the internet websites, showed that especially Ukraine is interested in cooperating with Poland because it allows it to buy gas other than Russian.

Strategic significance

Undoubtedly deliveries of US gas are the way to go from the point of view of both, diversification of supply of the raw material, as well as the building of stronger political relations with the USA. The utilization of the Polish LNG terminal as a transfer window for American petrochemical companies offers a more reliable guarantee that the US administration will remain interested in Poland. Therefore, developing trade relations that are attractively priced for Poland for a longer period, may unite economic interests with firmer military security guarantees. US gas deliveries to Europe are also part of the US’s geopolitical strategy, which on the one hand is looking for new markets for the growing shale gas industry, and on the other wants to weaken Europe’s dependency on Russian gas.

During the “Industrial Summit. Europe meets Ukraine 2017,” organized by the Casimir Pulaski Foundation, energy expert, Professor Alan Riley from City University of London was right to say that the “inundation” of Europe with cheap LNG from the US was just a matter of time, and “just like in the past the US sent their Marines, today they will be sending LNG carriers.”

Additionally, President Donald Trump promised to increase hydrocarbon export to Europe during his election campaign. The first delivery of US gas to Poland is also an extra safety for ensuring supply stability in view of the recent events in the Arab countries, especially when it comes to the breaking of diplomatic ties of the Arab Peninsula states with Qatar, which is suspected of supporting terrorism.