U.S. LNG sent to Poland a message to Putin, Louisiana senator says

Nov. 22 (UPI) -- Sending liquefied natural gas drawn from U.S. reservoirs to Poland sends a strong message to the Russian president about influence, a Louisiana senator said.

Polish Oil and Gas Co., known commonly as PGNiG, signed a five-year contract to secure LNG from the Sabine Pass terminal in Louisiana, the first mid-term contract of its kind.

U.S. Sen. Bill Cassidy, R-La., a member of a Senate energy committee, said the deal is a win on two fronts.

"Not only will our state be exporting American energy to Poland, an important ally of the U.S., but it will also be playing an important role in reducing Russian President Vladimir Putin's ability to bully Europe," he said in a statement.

European leaders have said LNG sourced from U.S. shale basins could present a source of diversity with the right infrastructure in place. Some countries in Eastern Europe like Poland rely almost exclusively on Russia for natural gas.

Starting next year, the contract lets PGNiG secure LNG from Centrica, a British company that will deliver up to nine cargoes of LNG from Sabine Pass and send it to the President Lech Kaczyński LNG terminal in Poland. The Polish company said the "primary source" of LNG supplies will be from Sabine Pass.

PGNiG President and CEO Piotr Woźniak said the agreement is based on current market conditions for LNG.

"Preceded by the long term contract for LNG deliveries from Qatar and several spot deliveries in 2017, this agreement shows that we are stepping into a new level of global LNG market activity," he said in a statement.

The Polish company added that, in October, it started looking to book capacity on a planned natural gas pipeline linking Poland to Norway, which could go into service in 2022. Apart from Russia, Norway is one of the main suppliers of natural gas to the European market.

A special permit is needed to send natural gas to countries without a U.S. free trade agreement, a scenario that could present roadblocks for future LNG exports to the European market. Without mentioning the United States in particular, Cecilia Malmstrom, the trade commissioner for the European Union, said in August "the scourge of protectionism" may create issues for multilateral trade.

European leaders have said LNG sourced from U.S. shale basins could present a source of diversity with the right infrastructure in place. Federal U.S. data show six LNG vessels left the Sabine Pass terminal in the week ending Nov. 10.