Page 4 - NorthAmOil Week 05 2023

NorthAmOil COMMENTARY NorthAmOil

US SPAs on the up as LNG

exports keep booming

US LNG continues to attract buyers amid Europe’s pivot away

from Russian gas, tight global supply and rising demand

GLOBAL LNG exports in the US are booming as supply in decision] later this quarter and commence
Europe remains tight given the continent’s pivot construction on the Port Arthur LNG Phase 1
WHAT: away from Russian gas in the wake of the war in project to help meet the increasing demand for
Global buyers are Ukraine. Global supplies of LNG were already LNG across Europe and the rest of the world,”
continuing to sign SPAs constrained, with demand in Asia rising prior to said Bird.
for US LNG volumes. the war, but the invasion of Ukraine exacerbated “Already last year, during a very tense situa-
the situation. tion on the EU energy market, the United States
WHY: became one of the main suppliers of natural gas
Europe’s pivot away from New deals to Poland,” added PKN Orlen’s CEO, Daniel
Russian gas boosted New supply agreements have already been Obajtek.
already growing demand announced in the opening weeks of 2023. Sem- Sempra previously announced long-term
for LNG. pra Energy has agreed to supply 1mn tonnes SPAs with buyers including ConocoPhillips,
per year (tpy) of LNG from its proposed Port UK-based Ineos, France’s Engie and Germany’s
WHAT NEXT: Arthur LNG Phase 1 project in Texas to Poland’s RWE for Port Arthur’s first phase.
New supply deals have PKN Orlen over a 20-year period. The projected Port Arthur Phase 1, which is fully permit-
already been signed in offtake capacity of Port Arthur’s first phase is ted, will include two natural gas liquefaction
the opening weeks of now fully subscribed under long-term agree- trains and LNG storage tanks and will have the
2023 and more will likely ments, with 10.5mn tpy under binding long- capacity to produce up to 13.5mn tpy of LNG.
follow. term deals. The first cargo deliveries from Port A similarly sized second phase is under active
Arthur are expected in 2027. marketing and development, said Sempra.
“We are excited to partner with PKN Orlen, Meanwhile, in mid-January, NextDecade
Central Europe’s largest energy group, as they announced a 15-year SPA with Itochu for the
continue to look for long-term, diverse sup- supply of LNG from its proposed Rio Grande
plies of secure energy sources,” said Sempra export project in Brownsville, Texas. Itochu has
Infrastructure’s CEO, Justin Bird. PKN Orlen agreed to purchase 1mn tpy.
recently acquired Poland’s PGNiG, which had “We are honoured to have Itochu Corpora-
previously struck a series of sale and purchase tion as our first Japanese customer,” said Next-
agreements (SPAs) with US LNG suppliers Decade’s chairman and CEO, Matt Schatzman.
including Sempra. “We look forward to providing Itochu and
“With the long-term off-take capacity for their customers with LNG, and we are actively
Phase 1 now sold under binding agreements, working to reduce the carbon footprint of the
we expect to reach FID [a final investment Rio Grande LNG facility through our proposed

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