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First American LNG Shipment for Ukraine Arrives at Polish Port

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LNG carrier at the Swinouscjie terminal (file image courtesy PGNiG)

By The Maritime Executive 2019-11-21 13:57:00

The first American LNG cargo for ultimate delivery to Ukraine has arrived at a terminal in the port of  Swinoujscie, Poland. The geopolitically-significant shipment represents the start of an alternative, non-Russian gas supply for Ukrainian consumers. "U.S. liquefied natural gas (LNG) is coming to Ukraine! Another step in helping Ukraine achieve energy independence," said the U.S. Embassy in Kiev in a twitter post. 

Ukraine is dependent upon Russian natural gas for heating and power, and it levies fees on Russian energy producers for providing pipeline capacity to Europe via Ukrainian territory. Tensions between Kiev and Moscow are at historic highs - the two nations are at war over the fate of Ukraine's eastern Donbass region - and the Russia-Ukraine gas transit agreement is up for renewal in December.

On September 2, the U.S. signed an agreement with Poland and Ukraine to formalize policy on supplying American natural gas to Kiev. The MOU calls for the shipment of up to six billion cubic meters per year to Ukranine by 2021. “The US is ready to help Ukraine achieve its full energy potential with American technology, resources and support,” said outgoing U.S. Secretary of Energy Rick Perry in announcing the deal.

The first 90 million cubic meter shipment was facilitated by Polish Oil and Gas Company (PGNiG) and Energy Resources of Ukraine, a private firm headed by longtime foreign-market utility executive Dale Perry and Ukrainian energy trader Yaroslav Mudryy.

“We contracted this volume for the purpose of injecting and storing it for further delivery to consumers in the winter season – this way we contribute to the country's energy safety during uncertain and especially risky winter period 2019-2020,” said Mudryy. “In this case, taking to the account well developed gas transportation system, Ukraine may not be the last destination for American LNG, it can be successfully delivered to countries like Hungary, Romania and even Moldova."

 “Currently, the only limitation in the development of exports to Ukraine on an even larger scale is the capacity of gas pipelines in Poland in the direction of Silesia–Podkarpacie. We expect the capacity of these gas pipelines to be expanded by 2021 at the latest,” said Piotr Wo?niak, the head of PGNiG's board.