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Poland Signs Deal for US LNG Delivery to Reduce Dependence on Russia

© REUTERS / Agencja Gazata/Cezary AszkielowiczThe LNG tanker "Clean Ocean" is pictured during the first U.S. delivery of liquefied natural gas to LNG terminal in Swinoujscie, Poland June 8, 2017
The LNG tanker Clean Ocean is pictured during the first U.S. delivery of liquefied natural gas to LNG terminal in Swinoujscie, Poland June 8, 2017 - Sputnik International
US Energy Secretary Rick Perry attended the signing ceremony during his tour of Western and Central Europe; the Trump cabinet member is promoting Washington’s energy partnership with the region and US exports of liquefied gas and coal.

Poland’s main gas company PGNiG signed a 24-year contract with the US-based supplier Cheniere during a ceremony in Warsaw. It was attended by Polish President Andrzej Duda and US Energy Secretary Rick Perry. He is touring Europe amid US efforts to expand its energy partnership with the eastern European countries. which would reduce dependence on Russia’s pipeline gas. He claimed that the continent’s future depends on Poland’s decisions, saying it will bring freedom and independence.

"This is a sign across Europe that this is how your energy security will be developed, your energy sources diversified," Perry said.

The Polish President echoed his statements, describing the deal as a step towards “energy security not only for Poland but for the whole region of Central and Eastern Europe.”  In Polish ruling party leader Jaroslaw Kaczynski‘s opinion, “the deal will increase Poland's energy security."

According to the deal, PGNiG will receive US liquefied natural gas, challenging the Russian supplier Gazprom, which Poland receives more than half of its gas from under a contract due to expire in 2022.

The deliveries are to begin in 2019, albeit not in full force. They would rise from 700 million cubic meters annually from 2019 to 2022, to 39 billion starting in 2023. The price of the deal has not been released by Poland’s energy giant. However, its management board’s president Piotr Wozniak revealed that the price is 20-30 percent lower than what it pays its supplier "in the East."

The deal is said to feature provisions to protect neighbouring Ukraine in  the event that Russia unexpectedly cuts off its gas supply.

Poland and neighbouring Ukraine have sided with the US in repeatedly voiced concerns over Europe’s dependence on Russian energy and the Nord Stream 2 gas pipeline project in particular. Polish President Andrzej Duda reiterated that Nord Stream 2 will disrupt the energy balance, create a threat to the energy security of a number of central and eastern European countries and strengthen Gazprom's dominance of the market.

READ MORE: US Envoy to EU Voices 'Blatant Threat' to Nord Stream 2 – Report

In this vein, the Polish President urged Berlin to abandon its participation in the pipeline's construction and buy more liquefied natural gas (LNG) from the US, saying that it should be a political and strategic decision.

Nord Stream 2 is a joint venture between Russia's energy giant Gazprom and the French company Engie, as well as Austria's OMV AG, the Anglo-Dutch company Royal Dutch Shell, as well as Germany's Uniper and Wintershall. The project, due be wrapped up before the end of 2019, stipulates the construction of two gas pipelines that will run from Russia, through the Baltic Sea to a hub in Germany, bypassing Ukraine entirely.

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