Released May 18, 2022 | SUGAR LAND
en
Written by Daniel Graeber for Industrial Info Resources (Sugar Land, Texas)--A vessel originating from Venture Global LNG's (Arlington, Virginia) new Calcasieu Pass export terminal for liquefied natural gas (LNG) in Louisiana made its debut in Poland. The event showcased something of an increase in U.S. exports into Russia's backyard.
The Maran Gas Apolonia delivered LNG to Polish energy giant PGNiG (Warsaw, Poland). Venture Global's first shipment to PGNiG left the Louisiana terminal on April 26 and made its first free on board (FOB) gas delivery on Sunday.
The delivery is part of a 20-year sales agreement reached in 2018 that calls for 2 million metric tons per year of LNG sourced from U.S. natural gas producers, which would work out to be about 25 cargoes a year.
The delivery arrived just as Russian natural gas company Gazprom halted flows through a section of the Yamal gas pipeline that runs through Poland. The disruption followed a Kremlin announcement that 31 energy companies, including some like PGNiG that have joint ventures with Gazprom, will face retaliatory sanctions for Western actions against Russia for its invasion of Ukraine.
Poland was at times almost entirely dependent on Russia for its supply of natural gas. By letting its contracts lapse, Poland now wants to break away from Russia completely.
Apart from the U.S., Poland and other European economies could lean on Norway to ensure adequate supplies of natural gas, which in this case would run through the undersea Baltic Pipe.
Poland relies on imports to make up 80% of the natural gas it consumes and finding replacements is no easy task. Some energy companies in the region have catered to Russian pressure and opened accounts that would allow for trade in rubles in order to avoid major energy disruptions. Italian energy company Eni S.p.A. (NYSE:E) (Rome) on Tuesday said it opened such an account, but would pay in euros and allow a Russian intermediary to convert the payments to rubles.
Poland, Lithuania and many Baltic countries were once under the Soviet umbrella, gaining independence only in 1991 after the Soviet Union collapsed.
As alliances pivot, so does the flow of goods; our data show that is the case with U.S. exports. In September last year, the U.S. sent no LNG to Poland.
That's now changed. Data from Refinitiv show that Poland has taken in about a half billion cubic feet per day of U.S.-sourced LNG through May 16. Lithuania went from nothing in January to importing about a quarter billion cubic feet per day as of Monday.
Click on the image at right for a Refinitiv chart showing U.S. LNG exports by month.
Meanwhile, scheduled maintenance has caused total U.S. LNG exports to drop somewhat and deliveries to legacy customers in Asia also are on the decline.
Demand is under pressure in Asia, in part due to the strict, zero-tolerance policy for COVID-19 in China. Considering shipping distances, it would make sense that the center of the global appetite for LNG would pivot to Europe. This is particularly so given the evolution of Russia, a world leader in oil and gas production, as a pariah state.
Indeed, there are profound geopolitical links to the energy sector. U.S. national security policies from the likes of President Jimmy Carter put energy security front and center of foreign policy. Carter vowed to protect the shipping lanes in the Middle East to ensure an adequate supply of oil. Now, U.S. energy and foreign policy seems squarely focused on Europe.
Russia also is using its energy dominance for geopolitical gain, but it is losing leverage.
The U.S. is on pace to become a world leader in LNG deliveries. However, it is possible that its shipments won't dominate one single market, given its distance relative to countries such as Norway or Qatar.
Trade relationships are clearly moving in lock step with geopolitical issues. Factors include Germany's embrace of LNG, the general disdain for Russia and LNG's entrance into the former Soviet sphere of influence.
Industrial Info Resources (IIR) is the world's leading provider of market intelligence across the upstream, midstream and downstream energy markets and all other major industrial markets. IIR's Global Market Intelligence Platform (GMI) supports our end-users across their core businesses, and helps them connect trends across multiple markets with access to real, qualified and validated project opportunities. Follow IIR on: LinkedIn.
The Maran Gas Apolonia delivered LNG to Polish energy giant PGNiG (Warsaw, Poland). Venture Global's first shipment to PGNiG left the Louisiana terminal on April 26 and made its first free on board (FOB) gas delivery on Sunday.
The delivery is part of a 20-year sales agreement reached in 2018 that calls for 2 million metric tons per year of LNG sourced from U.S. natural gas producers, which would work out to be about 25 cargoes a year.
The delivery arrived just as Russian natural gas company Gazprom halted flows through a section of the Yamal gas pipeline that runs through Poland. The disruption followed a Kremlin announcement that 31 energy companies, including some like PGNiG that have joint ventures with Gazprom, will face retaliatory sanctions for Western actions against Russia for its invasion of Ukraine.
Poland was at times almost entirely dependent on Russia for its supply of natural gas. By letting its contracts lapse, Poland now wants to break away from Russia completely.
Apart from the U.S., Poland and other European economies could lean on Norway to ensure adequate supplies of natural gas, which in this case would run through the undersea Baltic Pipe.
Poland relies on imports to make up 80% of the natural gas it consumes and finding replacements is no easy task. Some energy companies in the region have catered to Russian pressure and opened accounts that would allow for trade in rubles in order to avoid major energy disruptions. Italian energy company Eni S.p.A. (NYSE:E) (Rome) on Tuesday said it opened such an account, but would pay in euros and allow a Russian intermediary to convert the payments to rubles.
Poland, Lithuania and many Baltic countries were once under the Soviet umbrella, gaining independence only in 1991 after the Soviet Union collapsed.
As alliances pivot, so does the flow of goods; our data show that is the case with U.S. exports. In September last year, the U.S. sent no LNG to Poland.
That's now changed. Data from Refinitiv show that Poland has taken in about a half billion cubic feet per day of U.S.-sourced LNG through May 16. Lithuania went from nothing in January to importing about a quarter billion cubic feet per day as of Monday.
Meanwhile, scheduled maintenance has caused total U.S. LNG exports to drop somewhat and deliveries to legacy customers in Asia also are on the decline.
Demand is under pressure in Asia, in part due to the strict, zero-tolerance policy for COVID-19 in China. Considering shipping distances, it would make sense that the center of the global appetite for LNG would pivot to Europe. This is particularly so given the evolution of Russia, a world leader in oil and gas production, as a pariah state.
Indeed, there are profound geopolitical links to the energy sector. U.S. national security policies from the likes of President Jimmy Carter put energy security front and center of foreign policy. Carter vowed to protect the shipping lanes in the Middle East to ensure an adequate supply of oil. Now, U.S. energy and foreign policy seems squarely focused on Europe.
Russia also is using its energy dominance for geopolitical gain, but it is losing leverage.
The U.S. is on pace to become a world leader in LNG deliveries. However, it is possible that its shipments won't dominate one single market, given its distance relative to countries such as Norway or Qatar.
Trade relationships are clearly moving in lock step with geopolitical issues. Factors include Germany's embrace of LNG, the general disdain for Russia and LNG's entrance into the former Soviet sphere of influence.
Industrial Info Resources (IIR) is the world's leading provider of market intelligence across the upstream, midstream and downstream energy markets and all other major industrial markets. IIR's Global Market Intelligence Platform (GMI) supports our end-users across their core businesses, and helps them connect trends across multiple markets with access to real, qualified and validated project opportunities. Follow IIR on: LinkedIn.
