Polish PGNiG Ends LNG Deal Over U.S. Texas Port Arthur Delays

WARSAW (Reuters) — PGNiG has terminated a deal with U.S. firm Sempra Energy for LNG supplies from the Texas Port Arthur project due to delays, Poland's biggest gas company said on Tuesday.

State-run PGNiG signed a 20-year agreement with Sempra in 2018, as part of its bigger plan to cut reliance on gas imports from Russia. PGNiG was to receive around 2 million tons of LNG per year under the deal, starting from 2023.

Sempra said in May it would probably move its planned final investment decision (FID) on the Port Arthur LNG export plant in Texas from 2021 to 2022.

"The decision was made due to delays in the project's development," PGNiG said in a statement.

PGNiG also signed a memorandum with Sempra under which it could potentially receive the volumes originally contracted at Port Arthur from other Sempra facilities.

The Polish company said it signed agreements to increase LNG purchases from U.S. company Venture Global LNG by 2 million tons a year to 5.5 million tons.

Under Poland's ruling Law and Justice (PiS) party, Warsaw has deepened its energy cooperation with the United States. It agreed to buy more U.S. LNG and also hopes the United States will help it build and finance its first nuclear power plant.

But PiS relations with Washington have weakened since Joe Biden won the U.S. presidential election.

Poland opposed the waiver of U.S. sanctions on the company behind Russia's Nord Stream 2 and condemned a U.S. deal with Germany over the project. Under that deal between Washington and Berlin, Russia would face penalty costs if Moscow used the new pipeline to harm Ukraine or other eastern European countries.

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