Germany Says It Will Accelerate Construction Of Country's First Two LNG Import Terminals To Reduce Reliance On Russian Energy

In a bid to reduce energy dependence on Russia and diversify supply sources, the German government announced on Monday (Feb 28) that it will accelerate the construction of what would be the country’s first two liquefied natural gas (LNG) import terminals.

“We have decided to quickly build two liquefied natural gas terminals, LNG terminals, in Brunsbüttel and Wilhelmshaven,” said Chancellor Olaf Scholz informed parliamentarians in the Bundestag during a special session on the Ukraine-Russia crisis.

Germany currently has no LNG receiving and regasification capacity.

Scholtz said that the new terminals will be eventually transformed to handle climate-friendly gases.

“An LNG terminal that receives gas today can also receive green hydrogen tomorrow,” said Scholz.

Hit by delays in approvals and policy uncertainty, Germany has not progressed on its plan to build an 8 Bcm (billion cubic metres) of natural gas per annum facility at Brunsbuttel and a 12 Bcm per annum terminal at Stade.

The planned terminal in Brunsbüttel on the North Sea coast in the state of Schleswig-Holstein is yet to receive a construction permit.

German LNG Terminal (GLT), a consortium comprising of Vopak, gas grid operator Gasunie and Oiltanking (a subsidiary of the Hamburg-based Marquard & Bahls AG) that will build the terminal in Brunsbüttel, has promised to help Germany decrease its reliance on Russian gas, as LNG can be delivered by ship from countries including the U.S and Qatar.

The German government is reportedly requesting energy company Uniper to revive its shelved plans for an LNG port in Wilhelmshaven. The company had dropped plans to construct the terminal last year due to lack of interest in the LNG sector in terms of booking large, long-term capacities for LNG regasification in Germany.

This lack of a business case had caused the debate about a domestic LNG terminal to largely subside in recent years. However, the wish to diversify supply to lessen reliance on Russia in light of President Putin's war against Ukraine, as well as high gas prices have revived discussions. Germany has a well-developed natural gas pipeline grid and can be supplied via neighbouring countries’ LNG ports, but so far it does not have its own import terminal.

Economy and climate minister Robert Habeck sees this as necessary to “govern energy supply on our own state territory and guarantee sovereignty.”

The Ukrainian crisis has exposed Germany's problematic dependence on Russian gas, just as Germany faces some of the highest energy prices in the developed world.

A number of factors have converged to make Germany the biggest buyer of Russian gas in the world. Russia now provides for 55 per cent of Germany’s gas imports - up from 40 per cent in 2012 – against around 40 per cent on average for the European Union, according to the EU’s statistics agency Eurostat. This means any supply cut from Russian side would hit Berlin hard and this explains partially why Germany has not been very enthusiastic about the aggressive rhetoric emanating from US and UK.

(With inputs from Clean Energy Wire)