Soon, two more ships transporting natural gas (LNG) will join the ORLEN Group – “Święta Barbara” and “Ignacy Łukasiewicz”. A naming ceremony for these units was held at the Hyundai Samho Heavy Industries shipyard in Mokpo, Korea.
The ships will begin sea service later this year, increasing the company’s capabilities in obtaining natural gas, and thus contributing to strengthening the country’s energy security.
– The ORLEN Group’s new gas carriers are another step in building Poland’s energy independence and developing the company’s operations on the global liquefied natural gas market. The strategy of diversifying the import of the blue fuel based on LNG supplies, which has been implemented for several years, has proven to be effective and has made it possible to completely abandon the Russian raw material during the extremely difficult period of the European energy crisis. During this time, we have built competences that we will use to further diversify gas sources to meet the demand of our customers in Poland and other countries in the region. Natural gas remains a strategic raw material, which is necessary not only in households and the chemical industry, but also enables an effective and safe energy transformation. Own LNG transport ships expand the logistics capabilities of the ORLEN Group, and thus increase the reliability of supplies, while reducing transport costs – says Daniel Obajtek, President of the ORLEN Management Board.
Ships named after distinguished people
The new gas carriers were named: “Saint Barbara”, in honor of the patron saint of miners, oil and gas workers, and “Ignacy Łukasiewicz” – in tribute to the pioneer of the global oil industry, outstanding inventor, industrialist and independence activist. The ships were built by the South Korean company Hyundai Samho Heavy Industries, and will be operated on the basis of a long-term charter agreement with the shipowner Knutsen OAS Shipping.
The gas carriers will be used both to execute long-term contracts and spot contracts in the free-on-board (FOB) formula, according to which the buyer, i.e. the ORLEN Group, is responsible for the collection and transport of the cargo.
The fleet, built on the company’s request, will effectively support the handling of LNG cargoes delivered to Poland. The outbreak of the war in Ukraine and the cessation of gas supplies to Europe from the east resulted in a significant increase in demand for LNG in this part of the world. In the first half of 2022, imports of liquefied natural gas to European Union countries amounted to 54.6 billion cubic meters, while in the corresponding period of 2021 it was 34.3 billion cubic meters.
Increased LNG supplies
The upward trend continues this year as well. Liquefied gas supplies to the EU in the first half of 2023 amounted to 61.3 billion cubic meters. (approx. 79% more than in the same period of 2021). The high demand for LNG translated into lower availability of gas carriers on the market and an increase in freight costs. Therefore, entities that – like the ORLEN Group – have their own transport facilities have gained an advantage.
Ultimately, the ORLEN Group’s fleet will consist of 8 units. The capacity of each ship is approximately 70,000. tons of LNG, which corresponds to approx. 100 million cubic meters. gas in a volatile state. The size of the gas carriers was selected so that the units could enter almost any LNG terminal in the world. All ships are equipped with solutions that increase their energy efficiency and reduce their impact on the natural environment. This includes, among other things, integrated management of electricity consumption and a reliquefaction system that allows the recovery of gas that naturally evaporates during transport.
Starting this year, two gas carriers from the ORLEN fleet are already operational – “Lech Kaczyński” and “Grażyna Gęsicka”, which delivered the first LNG loads to Poland in March and June, respectively. The next transport – by the gas carrier “Grażyna Gęsicka” – is expected at the turn of October and November this year.
LNG – a component of the diversification strategy
LNG for the ORLEN Group is one of the pillars of the strategy to diversify the directions and sources of obtaining the blue fuel for Poland. The share of raw materials delivered by sea in the concern’s imports is systematically growing. In 2021, it was only 24%, with a volume reaching 3.94 billion cubic meters. A year later, LNG accounted for 43%. of all imports, and its volume amounted to 6.04 billion cubic meters. This is an increase of over 50%, confirming that liquefied natural gas has become the main source of raw material from abroad for the ORLEN Group.
The company receives LNG primarily at the Terminal. President Lech Kaczyński in Świnoujście. So far, there have been 254 deliveries with a volume of approximately 20 million tons of LNG. Most cargo came from Qatar (127) and the USA (106). Supplies to Poland also came from Norway (13), Nigeria (3), Trinidad and Tobago (3), Egypt (1) and Equatorial Guinea (1).
Since May 2022, the company has also been using the terminal in Klaipėda, Lithuania. So far, 10 loads with a total volume of nearly 655,000 tons have been delivered here for the ORLEN Group. tons of liquefied natural gas. After regasification, the raw material goes to Poland via the Poland-Lithuania gas pipeline. Some of the fuel is also directed to the markets of the Baltic countries.
In addition to building its own fleet, ORLEN is also expanding the possibilities of receiving liquefied gas at domestic terminals. In August this year, the company concluded an agreement with GAZ-SYSTEM to reserve regasification capacity in the floating FSRU (Floating Storage Regasification Unit) terminal, which is being built in the Bay of Gdańsk. The development of infrastructure will allow the Group to increase the number of liquefied natural gas deliveries by up to 58 per year.