U.S. LNG expands to Eastern Europe as Poland avoids Russian gas

WARSAW (Bloomberg) -- The U.S. is set to ship its first shale gas to a member of the former Soviet bloc as Europe seeks to cut its dependence on fuel from Russia.

Poland’s state-owned PGNiG SA bought a spot liquefied natural gas cargo from Cheniere Energy’s Sabine Pass plant for delivery in June to the nation’s Baltic Sea import terminal, the first such contract for Central and Eastern Europe, it said Thursday. No LNG has been shipped to northern Europe since Sabine Pass started exports more than a year ago.

Poland may offer a new outlet for Cheniere, which said it’s targeting emerging markets as new production facilities from Australia to the U.S. lead to a glut of the fuel. Poland’s Law & Justice government has sought to cut the nation’s dependence on Russia’s Gazprom for more than two-thirds of gas supplies, stating it has no plan to extend a long-term supply contract beyond 2022 and plans new infrastructure including a pipeline to Norway.

The deal comes after PGNiG opened an LNG trading office in London in February and “proves Poland is a gateway for American LNG to central and eastern Europe,” CEO Piotr Wozniak said in a statement.

The agreement is historic and “commercially attractive,” Polish Prime Minister Beata Szydlo said in an interview with TVP Info television on Thursday, without being more specific on pricing.