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ORLEN expands with two new LNG carriers

Published by , Editorial Assistant
LNG Industry,

Saint Barbara and Ignacy Lukasiewicz are the new additions soon to join the ORLEN Group’s fleet of LNG vessels. The ship naming ceremony took place at the Hyundai Samho Heavy Industries shipyard in Mokpo, South Korea. Slated to commence sea service by the end of this year, the new vessels are set to bolster the ORLEN Group’s capacity for natural gas procurement and thus enhance Poland’s energy security.

ORLEN expands with two new LNG carriers

“The latest additions to the ORLEN Group’s fleet of gas carriers are important for the advancing of Poland’s energy independence and expanding our footprint in the global LNG market. Our commitment to diversifying gas imports, primarily through LNG supplies, has been a resounding success. This strategic approach has facilitated our shift away from Russian gas, allowing us to weather the challenges of the European energy crisis. Throughout this period, we have honed capabilities that will underpin our continued efforts to diversify gas procurement sources, meeting the needs of our customers in Poland and the broader region. Natural gas, as a strategic resource, plays an essential role in serving households and supporting the chemical industry, but it also remains a linchpin for an efficient and secure energy transition. Our own fleet of LNG vessels has expanded the ORLEN Group's logistical capacity, strengthening the reliability of supplies while reducing transport costs,” said Daniel Obajtek, CEO and President of the Management Board of ORLEN.

The new gas carriers have been christened with meaningful names: Saint Barbara pays homage to the patron saint of miners, oil and gas workers, while Ignacy Lukasiewicz honours the pioneering figure in the world oil industry, an illustrious inventor, industrialist, and advocate for Poland’s independence. Crafted by South Korea’s Hyundai Samho Heavy Industries, the vessels will operate under a long-term charter agreement with shipowner Knutsen OAS Shipping.

Once integrated into the fleet, the gas carriers will serve the dual purpose of accommodating both long-term contracts and spot contracts, based on the Free-On-Board (FOB) delivery terms, whereby the ORLEN Group, as the buyer, will be responsible for collecting and transporting the cargoes.

The ORLEN Group’s built-to-order fleet will play a pivotal role in the efficient handling of LNG shipments destined for Poland. The outbreak of the war in Ukraine, coupled with the halt in gas supplies to Europe from the eastern direction, has led to a substantial surge in demand for LNG within the region. In the first half of 2022, imports of liquefied natural gas into the EU reached 54.6 billion m3, a significant increase from 34.3 billion m3 in the same period of 2021. This upward trend has continued into 2023, witnessing LNG deliveries in a total amount of 61.3 billion m3 in the first half of this year – a 79% increase compared with the same period of 2021. The mounting demand for LNG has resulted in reduced availability of gas carriers in the market, pushing up freight costs. Against this backdrop, entities like the ORLEN Group, equipped with their own dedicated transport facilities, have been able to seize a competitive edge.

Ultimately, the total count of vessels in the ORLEN Group’s fleet will be brought to eight. Each vessel will have a capacity of approximately 70 000 t of LNG, which equates to roughly 100 million m3 of natural gas in gaseous state. In terms of size, the gas carriers have been designed to navigate virtually any LNG terminal across the globe. Furthermore, all the vessels have been equipped with solutions improving their energy efficiency and mitigating the environmental impact. These include integrated management of electricity consumption and a reliquefaction system to recover LNG that naturally evaporates during transport.

In terms of ongoing operations, two ships of the ORLEN Group’s fleet have already been deployed this year: Lech Kaczynski and Grazyna Gesicka, which delivered their inaugural LNG shipments to Poland in March and June, respectively. The upcoming shipment – by Grazyna Gesicka – is expected to arrive in late October or early November this year.

In addition to expanding its dedicated fleet, the ORLEN Group is also enhancing its capacity to receive liquefied gas at domestic terminals. An August agreement with GAZ-SYSTEM marked a significant step, securing regasification capacity at the forthcoming Floating Storage Regasification Unit (FSRU), set to be positioned in the Gulf of Gdansk. The infrastructure development is expected to boost the annual count of LNG deliveries received by the ORLEN Group by up to 58.

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