Poland to pay double for American gas, to reduce dependence on Russian gas

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Poland’s state natural gas company has signed a 20-year deal to buy liquefied natural gas (LNG) from the US. In order to cut dependence on Russian energy, the country is willing to pay double for gas from America.

PGNiG, Poland’s gas company, said on Wednesday that the US would provide two million tons of LNG per year, or 2.7 billion cubic meters of natural gas after re-gasification. The deliveries will start from 2022.

The country’s prime minister Mateusz Morawiecki said the deal would increase “sovereignty” and the “competitiveness” of Poland’s energy sector. PGNiG Deputy CEO Maciej Wozniak added that by the end of 2018 the company will sign at least one new long-term contract to secure LNG gas supplies for Poland.

PGNiG claimed that LNG from the US would be almost 30 percent cheaper than Russian natural gas. But official studies say otherwise. For example, the Oxford Institute for Energy Studies has published a memo saying that US LNG is significantly more expensive than Russian gas, which is the cheapest option for Europe. The study also said that pumping gas through Nord Stream and Nord Stream 2 pipelines would be cheaper than transit through Ukraine.

“Purchasing of liquefied natural gas in the USA will not only allow further diversification of our import portfolio following 2022, but will also let us develop our trading competences and enable PGNiG’s presence as a global LNG market player,” the Polish gas company said back in June.

Russia’s Gazprom reported Wednesday that gas supplies from Russia to Poland have recently increased. “Supplies to Poland, amid all the rhetoric against Russian gas, grew by almost 10 percent this year,” the company said.

  • vistina

    Great EU economics for the poorer countries. Pay double and call it a good deal.