German government announces fifth floating LNG terminal

Berlin has arranged for a fifth floating liquified natural gas (LNG) terminal in order to increase the amount of LNG the country is able to import, which may be a boon to the country’s landlocked neighbours. 

In May, the government announced that it had secured four of these repurposed LNG tankers. The retrofit ships, of which fewer than 70 exist worldwide, can regasify liquid fossil gas after shipping. Aside from the now five envisioned by the German government, private investors hope to station another in Lubmin, where the infamous Nord Stream pipelines come on land.

“All steps that free us as quickly as possible from the clutches of Russian imports are more necessary than ever in these times,” explained Robert Habeck, vice-chancellor and minister of economy and climate action, on Thursday (1 September), while presenting the consortium that will operate the new LNG terminal (FSRU).

Each of the government’s five mobile LNG terminals will be able to provide a minimum of 5 billion cubic meters (bcm) of gas per year, although some may be able to regasify around 8 bcm. Imports from Russia were historically around 50 bcm per year. 

The first two, at 5 bcm minimum capacity each, will enter operations before 2023, the government said, with anticipated start dates of around October or November 2022. The other three are slated to begin operating in advance of the following winter.

“We will have a different situation next year,” Habeck promised. It was “impressive” to achieve independence from Russian gas that fast, he added, citing the decades it took to slip into dependence on Russia.

“Together, the FSRUs alone can cover about one third of the current gas demand (base year 2021 – 90.5 billion),” the ministry said in a press release.

Habeck also spoke of a second private FSRU which may be stationed in Rostock, however, he added that he was not yet willing to include it in the government’s forecasts nor divulge any further information on the project.

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Hydrogen dreams 

The new FSRU will be operated by Tree Energy Solutions (TES), a would-be hydrogen importer, the German utility company E.ON and the German subsidiary of French utility Engie. 

Having hydrogen importer TES as part of the consortium could make it by far the most attractive FSRU to Germany’s Greens and environmental NGOs, who fear a fossil lock-in.

After all, the FSRU may be relatively short-lived before being salvaged for parts to help TES build its hydrogen import infrastructure, which is both cheaper and more environmentally friendly, TES’ CEO Marco Alverà said.

TES hopes to begin importing hydrogen in 2025, the German government said. Experts are largely critical of the merits of shipping hydrogen.

Alverà’s company hopes to be more economic by mixing hydrogen with CO2, creating “synthetic LNG” as he put it, which would allow the price to go down from today’s €100 per MWh down to €40 MWh in the future.

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EU interests

Germany was long a pivotal gas distributor for Europe, importing from Russia before exporting to fellow EU countries. With Russian supplies dwindling, its landlocked neighbours – such as Czechia, Austria and Switzerland – eye any LNG developments with keen interest.

During Chancellor Olaf Scholz’s last visit to Prague at the end of August, Czech Prime Minister Petr Fiala expressed an interest in acquiring capacity in any future LNG terminals that Germany is set to build.

Gas flows from Germany to Czechia have dwindled in the past months, declining from 40 TWh worth of gas in March down to 19 TWh in July. 

“We are in a constant exchange with our European partners,” Habeck explained.

“But of course the whole thing is always embedded in the European energy strategy,” he added.

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[Edited by Nathalie Weatherald]

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