Wilhelmshaven The federal government could hardly have chosen a more suitable day to inaugurate Germany’s first LNG terminal. When Federal Chancellor Olaf Scholz visited the new terminal on Saturday, an icy wind was blowing. It was below zero – it was as if the weather wanted to emphasize the importance of the terminal to the state.
The terminal enables the import of liquefied gas – so-called LNG – that comes to Germany on ships. Since Russia stopped supplying gas through pipelines, Germany has had a desperate need for imports from other regions, especially on cold winter days like the current one. The terminal was therefore launched at record speed.
Scholz said at the opening: “German federalism with all its different structures works. If we join hands, we can manage such big tasks in a very short time.” He spoke of a world record and a new “Germany speed that we now always want to show.”
The inauguration is a milestone for Germany’s gas supply – and a relief for the federal government. Accordingly, in addition to Federal Chancellor Olaf Scholz, Economics Minister Robert Habeck and Finance Minister Christian Lindner followed numerous company representatives on Saturday with a passenger ship to the floating terminal.
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However, only the Chancellor spoke on the icy deck of the ship. He stressed: “Russian President Putin thought he could blackmail us by cutting off gas supplies. But he was wrong. We will not be blackmailed.”
LNG imports by special ship
The terminal in Wilhelmshaven is not a permanent installation, but a special ship, a so-called Floating Storage and Regasification Unit (FSRU). The approximately 300 meter long ship called Höegh Esperanza converts liquefied natural gas back into the gaseous state so that it can be fed into the gas grid.
LNG, Liquefied Natural Gas, is natural gas that is cooled down to -162° Celsius and then has only one six hundredth of its original volume in the liquid state. This allows it to be transported in tankers. These land the gas at terminals where it is brought back to normal temperature and pumped into the gas grid.
The liquid gas special ship Höegh Esperanza arrived in Wilhelmshaven on Thursday.
(Photo: Getty Images)
The ship actually belongs to a Norwegian shipping company, was built in South Korea in 2018 and has been used in China in recent years. In May 2022, the federal government then agreed on deployment in Germany with the Norwegian owner. Since Thursday afternoon, the Höegh Esperanzaa has been at a newly built jetty north of the deep-water port Jade-Weser-Port in Wilhelmshaven.
The commissioning of the Höegh Esperanza is the start of a series of LNG terminals that will enable LNG imports to Germany in the future. Another special ship is scheduled to launch in Brunsbüttel this winter. A third and fourth FSRU will be located in Stade and Lubmin and will be deployed at the end of 2023. In addition, a private LNG ship in Lubmin is planned for this winter. This project is also nearing completion; according to the Ministry of Economic Affairs, the final approvals are still pending.
Germany could install up to eleven LNG terminals
A total of up to eleven LNG import terminals could be installed in Germany in the next few years, including three permanent terminals. That would correspond to an import capacity of 73 billion cubic meters of gas per year.
For comparison: before the Ukraine war, Germany imported around 50 billion cubic meters of gas a year from Russia. In the meantime, however, Russia is no longer delivering pipeline gas to Germany because of the conflict.
Now, after just seven months, the first of the projects is becoming a reality. Last Monday, the last section of the pipeline was installed, which will in future transport the natural gas from the terminal in Wilhelmshaven. On Friday, the state of Lower Saxony issued the last outstanding water law permit for the FSRU.
On December 22, the first gas is to flow into the German gas network via the Höegh Esperanza. The special ship has already brought this gas with it.
The FSRU was previously loaded with around 165 thousand cubic meters of LNG in Spain. According to the operator Uniper, this is enough to supply around 50,000 to 80,000 German households for a year.
Germany still dependent on short-term LNG purchases
However, the import capacities from LNG terminals alone do not secure Germany’s energy supply. In the future, the Höegh Esperanza will no longer bring the LNG to Wilhelmshaven itself. Their task is only to regasify delivered LNG.
But Germany has to buy this LNG worldwide. So far, the federal government has hardly succeeded in concluding new long-term gas supply contracts with other countries that can replace the Russian gas supplies that have been lost.
There is only an agreement for a delivery of 137,000 cubic meters of LNG in December and a few more LNG shipments from Abu Dhabi. However, the 137,000 cubic meters correspond to only about 0.2 percent of the earlier Russian annual delivery via pipelines.
Qatar has also agreed to supply Germany with up to two million tons of LNG per year. But even that only corresponds to around 2.7 billion cubic meters of natural gas – very little compared to the missing 50 billion from Russia. In addition, the first delivery should not come until 2026.
As long as Germany cannot conclude sufficiently firm LNG supply contracts with other countries, the country will be dependent on short-term LNG purchases on the world market in addition to pipeline supplies from other European countries.
With such purchases, Germany has managed to completely fill up its gas storage facilities in recent months – albeit at extremely high costs, which has pushed up gas prices even further across Europe, including for economic importers.
In the future, the Höegh Esperanza will feed at least five billion cubic meters of natural gas into the German gas network. That is around six percent of Germany’s gas requirements – and would thus replace around eleven percent of Germany’s gas imports from Russia.
Controversy over climate impact
However, it is controversial how the new German LNG terminals will affect the climate targets. The head of the German Energy Agency (dena), Andreas Kuhlmann, says: “Unlike new import pipelines, FSRUs are more compatible with German climate targets because they are only used for a limited time. Because in the next few years, not only natural gas, but also climate-friendly hydrogen produced from renewable electricity in the form of ammonia is to be imported. As a result, new connection lines at the site are largely designed for the future carrier and open up new access to the hydrogen market for Germany.”
>>Read here: The construction of the LNG terminals is progressing so quickly
The Bund für Umwelt und Naturschutz Deutschland (BUND) sees things differently. Its boss Olaf Bandt says: “The planned construction of LNG terminals goes far beyond what would be necessary to get through the next winter well. The traffic light government is making a fatal mistake. It manifests a fossil infrastructure for decades to come. In doing so, it operates the opposite of climate-responsible politics.”
Contrary to what is often claimed, floating LNG terminals cannot be converted to hydrogen. The operation of the first floating LNG terminal must be limited in time to a much greater extent. Together with other associations, the BUND is examining whether to sue for a change in the permit.
For Kerstin Andrea, head of the Federal Association of Energy and Water Industries (BDEW), one thing is clear: “Floating LNG terminals should only be an interim solution. We now also have to push ahead with the planning and construction of stationary terminals, in which future use of the terminals with hydrogen and its derivatives is consistently considered from the outset.”
More: The inauguration of Germany’s first LNG terminal shows that it shouldn’t have become dependent on Russian gas