However, the two planned systems in Brunsbüttel and Stade should not go into operation until 2026 at the earliest, only the one in Wilhelmshaven could already be available in winter 2023/2024. So it will still be some time before a significant contribution is made to securing the gas supply with our own LNG terminals.
Experts are therefore calling for floating LNG terminals to be used for the transition. These systems, called Floating Storage and Regasification Units (FSRU) in technical jargon, already exist; they only have to be brought to Brunsbüttel, Stade, Wilhelmshaven or another suitable port.
According to Christian Breuel from the Schulte Group, a Hamburg shipping company with many years of experience in the management of LNG tankers, this solution would be available quickly: “We are optimistic that we will have such a special ship ready for operation in Germany before the start of next winter”, he told the Handelsblatt.
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The ships are in demand at the moment given the geopolitical situation. “But we see the possibility of procuring ships,” said Breuel.
According to Breuel, there are currently 48 FSRUs worldwide, including some that can be chartered at short notice. With an annual output of around five billion cubic meters of gas per ship, a total of 15 billion cubic meters of gas and thus 30 percent of annual Russian imports can be replaced at three German locations, according to a concept paper by the Schulte Group. It is a “quick-to-install, temporary solution”.
Connection as a challenge
The paper refers to Lithuania. With the FSRU “Independence” in the city of Klaipeda, the country has successfully and impressively demonstrated that the floating LNG terminals are suitable as a quick interim solution. Experts emphasize that the construction of the planned stationary terminals can be pushed ahead parallel to the operation of the FSRU units.
The connection of the planned terminals to the long-distance gas pipeline network could prove to be a bottleneck in Germany. In Brunsbüttel, for example, a connection line with a length of around 65 kilometers has to be built.
The lead time for planning and approval is immense. Breuel sees this problem. “Of course, the connection to the long-distance gas pipeline network is a challenge,” he said. Politicians are required to speed up approval processes.
So far, FSRUs have played no role in the German debate as an interim solution. The project in Wilhelmshaven is also planned as a floating solution, but the system has yet to be built. It should be used for continuous operation.
Independence from Russia as a goal
Time is running out. The coming winter in particular could become a challenge. The first politicians are therefore advising to rely on FSRU as an interim solution to increase the security of gas supply.
Michael Kruse, spokesman for energy policy for the FDP parliamentary group, said the federal government must quickly charter FSRU ship capacities and identify and approve suitable berths in coordination with the private sector. “If everything goes well, we could have an operational FSRU terminal by winter 2022/2023 and import LNG ourselves,” Kruse told Handelsblatt.
In this way, Kruse is certain that import capacities for LNG in Europe as a whole could be increased in the very short term. In addition, Germany would become less dependent on Russian gas.
The construction of an LNG terminal has been discussed in Germany for years. Industry experts have long pointed out that an LNG terminal is a kind of insurance policy in case deliveries via the pipeline from Russia should fail. For years, critics countered that the European neighbors still had plenty of free terminal capacity for importing LNG, so a separate terminal was not necessary.
But that is only part of the truth. When push comes to shove, infrastructure proves to be a bottleneck. For example, Spain and Portugal have significant capacity to import LNG. However, there is a lack of pipeline capacity to transport the gas in large quantities from the Iberian Peninsula to northern Europe.
With the current geopolitical situation, own LNG terminals have come back into the focus of political debate. The federal government is making feverish efforts to promote the construction of LNG terminals. Federal Economics Minister Robert Habeck (Greens) favors the Brunsbüttel and Wilhelmshaven locations.
The port on the North Sea is under discussion as a location for a new LNG terminal.
(Photo: dpa)
However, it should be four years before the LNG terminal planned in Brunsbüttel, Schleswig-Holstein, goes into operation. Michael Kleemiß, Managing Director of German LNG Terminal GmbH, which is driving the project in Brunsbüttel, told Handelsblatt that it was “realistic to expect completion in 2026”.
“Unfortunately, it has come true that it is dangerous to become too dependent,” said Kleemiss. Given the current signs of the Ukraine war, the aspect of security of supply has come to the fore. “This has given our project a different status,” he said.
The Federal Ministry of Economics recently announced that the federal government wanted to take a 50 percent stake in the terminal in Brunsbrüttel via the state development bank KfW. Accordingly, KfW will take over a 50 percent share in the LNG terminal through a financial contribution for the federal government.
Gasunie will be the operator of the LNG terminal. The gas network operator is 100 percent owned by the Dutch state. Another partner is the energy company RWE.
With the federal government getting involved, the project is now a decisive step closer to being realised. Gasunie was involved in the project from the start, two other shareholders – the Dutch oil and gas logistics company Vopak and Oiltanking GmbH from Hamburg – are leaving within the next few weeks.
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The terminal in Brunsbüttel will be able to process eight billion cubic meters of natural gas. To put this in context: Last year, almost 60 billion cubic meters of natural gas flowed from Russia to Germany and from there to other European countries through the Nord Stream 1 natural gas pipeline.
According to Kleemiß, the regulatory framework for an LNG terminal in Germany is not yet ideal. “The level of the tariff for feeding into the grid is too high”. In addition, the obligation to reserve ten percent of the capacities for short-term marketing is an obstacle. “We will seek talks with the Federal Network Agency to see if there are other options here.”
Wilhelmshaven is a possible second location for a terminal. Uniper had planned a plant there years ago, but the project never materialized. Now, however, the federal government is urging the company to take up the project again.
Whether and in what form the federal government is involved is still unclear at the moment. The actors keep a low profile. In industry circles it is said that intensive negotiations are taking place.
An LNG terminal is also being promoted in Stade. “We are in close contact with politicians, but are still privately financed,” said a spokeswoman for Hanseatic Energy Hub GmbH (HEH), the company behind the project. HEH’s shareholders are the gas infrastructure operator Fluxys (Belgium), the Partners Group (Switzerland) and the Buss Group from Hamburg.
“We will submit our approval documents at Easter. This means that by the end of 2026 we will be ready to cover around ten percent of Germany’s gas needs during peak loads,” announced the spokeswoman.
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