According to a recent Platts report, the first US LNG shipment is set to arrive in Ukraine.
The LNG cargo
A ship carrying the LNG cargo destined for Ukraine arrived earlier this week at the Świnoujście, Poland LNG landing terminal in the Baltic Sea.
- This forms part of a US agreement with Poland and Ukraine in September, aiming to formalize policy on the supply of American natural gas to Kiev.
- Under the agreement, the US will ship up to six billion cubic meters per year to Ukraine by 2021.
Import Via Pipeline
Ukraine itself has no LNG import capabilities, but can import regasified LNG via pipeline from the Polish terminal.
The Embassy said, “US LNG is coming to Ukraine. Another step in helping Ukraine achieve energy independence.”
LNG at affordable price
The buyer of the gas is private trading company Energy Resources of Ukraine, which plans to inject the gas totaling 90 million cu m into Ukrainian gas storage in the near future, the company said.
“While others are planning, we do,” ERU said in a statement. “The transatlantic gas supply corridor is working. US LNG for Ukraine arrived at Swinoujscie on November 19.”
The company said that through effective market mechanisms, LNG can be purchased at affordable prices.
“For Ukraine, LNG can become one of the elements of building energy independence,” ERU said.
Import capacity
Ukraine, which relied on Russian gas for decades, suspended imports of Russian gas in November 2015, and currently depends on imports from Europe.
Ukraine is capable of importing about 1.5 Bcm/year of gas from Poland and this capacity is set to be expanded to 5 Bcm/year in 2020.
The shipment comes as relations between Russia’s Gazprom and Ukraine’s Naftogaz remain tense with no progress on gas transit talks.
Supply until end 2019
- Polish Oil and Gas Company (PGNiG) purchased the cargo of LNG from the US in late summer
- sold it to Energy Resources of Ukraine (ERU), transferring it via the gas connection in Hermanowice.
Supplies to the Ukraine will be carried out until the end of 2019.
Gas pipeline capacity expansion
“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,” commented Piotr Woźniak, President of the PGNiG Management Board.
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Source: Platts
