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Boston — Poland's state natural gas company PGNiG has agreed to buy an additional 1.5 million mt/year of LNG from one of three export projects that Venture Global LNG is developing in Louisiana, the companies said Wednesday.

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The agreement comes as Venture Global looks to bolster financing arrangements that will allow it to complete its Calcasieu Pass terminal, which has begun initial construction work in Cameron Parish. While the developer has not formally announced a final investment decision, an executive previously told S&P Global Platts that the decision was made internally some time ago.

At the same time, Venture Global is pursuing its other two terminal projects with similar aggressiveness: Plaquemines LNG south of New Orleans and the recently announced Delta LNG, which also will be sited in Plaquemines Parish. The expanded offtake deal with the Polish company is tied to Plaquemines LNG.

PGNiG's deputy CEO for trade, Maciej Wozniak, signed the agreement at the White House ahead of a meeting between US President Donald Trump and his Polish counterpart, Andrzej Duda.

The two presidents were expected to sign a political agreement on enhanced energy and military cooperation that will boost US troop numbers stationed in Poland amid concerns in Warsaw about the threat from Russia following invasions of Georgia and Ukraine. Currently between 4,000-5,000 US troops are stationed in Poland on a persistent rotational basis. The new LNG deal is part of growing energy trade between Poland and the US.

Poland wants to break its decades-long dependence on Russian gas through the construction of the Baltic Pipe pipeline to directly access Norwegian gas and increased LNG deliveries to its Swinoujscie terminal, much of it sourced from the US. PGNiG currently buys gas from Gazprom under a partially oil-indexed Yamal supply contract that expires in October 2022.

"We are increasing our LNG portfolio in terms of volumes, which we will receive from the USA after 2022, i.e. after the expiration of the Yamal contract," PGNiG's CEO Piotr Wozniak said after the signing. "Thanks to good relations with our American partners and effective negotiations, we have achieved a highly competitive LNG supply from the Plaquemines terminal."

PGNiG has now committed to buying 3.5 million mt/year of LNG from Venture Global LNG, with 2.5 million mt/year to be sourced from the under-development 20 million mt/year Plaquemines LNG facility and the 1 million mt/year from the already under-construction 10 million mt/year Calcasieu Pass facility at the intersection of the Calcasieu Ship Channel and the Gulf of Mexico.

In May, the US Federal Energy Regulatory Commission issued a final environmental impact statement for both the Plaquemines facility and the associated Gator Express pipeline. Venture Global expects to take a final investment decision and start construction in late 2019 and begin commercial operations in 2023. Construction of Delta LNG, which is proposed to have peak capacity of up to 24 million mt/year, is targeted to begin in late 2021, with first deliveries of LNG to begin in the fourth quarter of 2023.

OTHER PROJECTS

In 2018, PGNiG signed four long-term supply contracts with Port Arthur LNG, Cheniere Energy, Venture Global and British utility Centrica, although the gas from the latter contract will be sourced from the US.

The first cargoes from Centrica are expected to start arriving in Swinoujscie this year, with deliveries from Cheniere, Port Arthur and Venture Global commencing in 2022-23. PGNiG will have the option to resell the volumes under the latter two contracts.

Other US liquefaction terminals are also looking to get off the ground. Commonwealth LNG said Wednesday it signed a heads of agreement with global commodity trader Gunvor that anticipates the negotiation and finalization of a definitive 15-year sale-and-purchase agreement for 1.5 million mt/year of LNG offtake from Commonwealth's export project under development in Cameron Parish. Commonwealth LNG said it expects to take FID on the project next year.

-- Adam Easton and Harry Weber, newsdesk@spglobal.com

-- Edited by Richard Rubin, newsdesk@spglobal.com

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