Burned by Russia, Poland turns to US for natural gas and energy security

- Stanley Reed, SWINOUJSCIE (Poland)

Feb 28, 2019-

Gargantuan tankers pull into this port on the Baltic Sea twice a month, ferrying liquid natural gas from producers in Qatar, Norway and, increasingly, the United States.

The fuel will help light and heat millions of Polish homes, while gradually cutting the country’s dependence on coal.

This fuel is also an important geopolitical strategy.

Poland is determined to end its reliance on Russian energy within the next few years, part of a broader effort in Europe to diversify the region’s energy supply. Relations with Russia have been unsettled, sometimes perilously, over political differences as well as the role of Poland, a former Soviet satellite, in NATO.

The country has found a ready replacement in the United

States, which has an abundance

of natural gas from the shale boom and a political incentive

to ease Russia’s chokehold on Europe. Once it is chilled into a liquid, natural gas can be shipped around the world.

American companies now have contracts that span decades and promise to supply Poland with the equivalent of about half of its current gas imports.

“Given a choice of suppliers and a good commercial deal, Poland was happy to buy American,” said David L. Goldwyn, who served as the State Department’s international energy envoy in the Obama administration and now, heads

an advisory firm, Goldwyn Global Strategies.

Poland’s resolve is etched in this port in Swinoujscie. Ten years ago, a conflict between Russia and Ukraine left Poland and some of its neighbors in the cold when the Russian energy giant Gazprom shut down a critical pipeline for three weeks over a politically tinged pricing dispute. Much of the gas that Russia exports to Europe flows through Ukraine.

This 2009 shutdown spurred Poland to build the terminal, which cost an estimated 1 billion euros, some financed by the European Union. The facility is named for Lech Kaczynski, the Polish president who died in a plane crash in Russia in 2010, a loss that hardened anti-Russian sentiment in Poland.

“The strategy of the company is just to forget about Eastern suppliers and especially about Gazprom,” said Piotr Wozniak, president of PGNiG, a listed but state-controlled company that dominates Poland’s gas market.

“For us it is a new world,” Wozniak added. “If I pay to Americans, I pay to my NATO allies.” There is a sense of purpose and camaraderie among the 90 or so people employed inside the tightly guarded 100-acre compound in this picturesque harbour town. Many have moved to the area recently and say they have bonded, helping one another with chores like home repairs.

“We know that the terminal plays a very important role in the energy security of Poland,” says Grzegorz Bledowski, the deputy director of operations, adding that the plant can quickly pump out enough natural gas to meet any interruptions in supplies to Poland.

The port is already reshaping Poland’s relationship with Russia.

Gas deliveries from Qatar began in 2015, which have been supplemented with one-off shipments from producers like Norway and the United States. PGNiG says the liquid natural gas shipments rose by almost 60 percent last year compared with 2017, squeezing imports from Russia and the East down by 6 percent. Russia currently supplies roughly half of Poland’s fuel.

In the last six months, three American companies, Cheniere Energy, Venture Global LNG and Sempra Energy, have all signed long-term agreements with Poland. The financial terms of their deals have not been disclosed and some depend on export facilities still to be built. But the expected shipments to this country of 38 million people could generate billions of dollars of revenue for the American suppliers.

“The attractiveness of LNG is its flexibility,” said Anatol Feygin, Cheniere’s chief commercial officer.


Published: 28-02-2019 13:18

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