ORLEN Group’s LNG and pipeline deliveries from new suppliers account for over 50% of imported gas

ORLEN Group’s LNG and pipeline deliveries from new suppliers account for over 50% of imported gas

(IN BRIEF) The ORLEN Group’s diversification of natural gas supplies has helped enhance Poland’s energy independence and strengthen fuel and commodity security in the region. In 2022, LNG and pipeline deliveries from new suppliers in Norway and Lithuania represented more than 50% of all gas imported by the group’s PGNiG, with nearly a quarter of those imports originating in the United States. This diversification of natural gas supplies to Poland was made possible by the expansion of the supplier base and the effective management of the increased offtake capacity at the President Lech Kaczyński LNG terminal in Świnoujście and new cross-border connections, including the Baltic Pipe running between Poland and Norway.

(PRESS RELEASE) PŁOCK, 18-Mar-2023 — /EuropaWire/ — In 2022, LNG and pipeline deliveries from new suppliers in Norway and Lithuania accounted for more than 50% of all gas imported by the ORLEN Group’s PGNiG, with close to a quarter of those imports originating in the United States. This diversification of natural gas supplies to Poland was made possible by the expansion of the supplier base and the effective management of the increased offtake capacity at the President Lech Kaczyński LNG terminal in Świnoujście and new cross-border connections, including the Baltic Pipe running between Poland and Norway, where the ORLEN Group owns gas assets. These developments were accelerated by the complete suspension of Russian gas imports in April 2022.

“Our quick and effective shift to new sources of gas supply in 2022 has helped ensure the security of Polish gas consumers as well as marking the successful culmination of the process to diversify supplies and enhance Poland’s energy independence, which has been underway for seven years now. We accelerated its finalisation in response to the gas crisis in Europe caused by Russia’s recent actions. Despite significant competition from other countries, we managed to increase imports of LNG and signed contracts for the purchase of Norwegian gas. We also began importing gas from Lithuania and Slovakia. Looking ahead, 2023 will be the first full year without any gas imports from Russia, which will be replaced by deliveries via the Baltic Pipe and LNG supplies under long-term contracts with US-based producers. The ORLEN Group’s diversified import portfolio will contribute to further strengthening the fuel and commodity security not only in Poland but also in the entire region,” says Daniel Obajtek, CEO and President of the Management Board of PKN ORLEN.

In 2022, the ORLEN Group primarily relied on LNG for gas imports. At 6.04 bcm, LNG deliveries accounted for as much as 43% of the Group’s total imports. This marks a significant, over 50% increase from 2021, when LNG deliveries, amounting to 3.94 bcm, represented 24% of all gas supplied to PKN ORLEN. The surge in LNG imports was a response to the supply crisis in the European gas market, resulting from Gazprom’s actions and the Russian invasion of Ukraine. The Group in particular increased LNG deliveries from the United States, which totalled approximately 3.4 bcm (after regasification) in 2022.

In 2022, most of the gas imported via pipelines came from countries west of Poland, including 3.4 bcm delivered through the Poland-Germany interconnectors, which made up roughly 25% of the PGNiG/ORLEN Group’s total imports. The volume of natural gas imported by Poland from its western and southern neighbours in 2022 amounted to around 3.8 bcm, representing more than 27% of the country’s total imports. This is a significant increase compared to 2021, when gas supplies from the western and southern directions totalled around 2.3 bcm, accounting for 14% of PGNiG’s imports.

In 2022, with a volume of 2.9 bcm, Russian gas deliveries represented just over 20% of all gas imports, down from 9.9 bcm and 61%, respectively, in the prior year. Poland has not been receiving any gas from Russia since April 27th 2022, when Gazprom ceased supplies to PGNiG following rejection by the latter of the former’s demand to change the settlement currency under the Yamal contract to the rouble, which was in violation of the contract’s provisions. This suspension of supplies only accelerated the already ongoing shift away from Russian imports, which would have ceased by the end of 2022 anyway due to the expiration of the Yamal contract.

In 2022, new gas interconnectors were brought online, which enabled further diversification of gas supplies and enhanced gas market integration in the region.

These new connections, including the Baltic Pipe and the Poland-Lithuania and Poland-Slovakia interconnectors, allowed the ORLEN Group to expand its import portfolio to include new, previously untapped sources, which enhanced gas supply diversification and security. In 2022, the ORLEN Group received approximately 1.26 bcm of natural gas from these new sources, which accounted for roughly 9% of the Company’s total imports.

Launched in Q4 2022, the Baltic Pipe enables gas imports from the Norwegian Continental Shelf, where the company holds 98 licences and produces hydrocarbons from 17 fields. During the first two months of its operation, the new pipeline’s capacity was limited, as technical work on the Danish section of the project was nearing completion. As a result, the ORLEN Group used this route to import approximately 0.7 bcm of gas, which was sourced from both the Group’s own production assets in Norway and from other producers operating on the Norwegian Continental Shelf.

In May 2022, the Poland-Lithuania Gas Pipeline was placed in service. By the end of last year, the ORLEN Group imported through it approximately 0.55 bcm of natural gas from the Klaipėda regasification terminal, which had received eight LNG cargoes from May 6th 2022.

Another new source of supply was established through an interconnector with Slovakia, from which ORLEN imported 0.03 bcm of gas in 2022.

The total volume of the ORLEN Group’s gas imports in 2022 was 13.91 bcm, down 14% year on year. The decrease was primarily attributable to lower demand from domestic customers, which is in line with preliminary data of the Ministry of Climate and Environment, which has estimated that gas consumption in Poland in 2022 fell by approximately 17% relative to the previous year.

Media Contact:

media@orlen.pl

SOURCE: PKN ORLEN