Germany to spend billions on floating LNG terminals

Germany’s government has reportedly allocated about €2.5 billion ($2.7 billion) for four floating liquefied natural gas (LNG) terminals around the country.

This was announced by the Federal Ministry of Finance on 14 April 2022 in a letter made available to the ARD Capital Studio and confirmed by several media outlets in Germany. In a speedy move, the ministry approved the release of funds without the involvement of the German federal parliament (Bundestag).

The “urgent” decision was taken by Germany in an effort to become independent of Russian gas as quickly as possible. What is more, the decision comes as Russian-European Nord Stream 2 pipeline in the Baltic Sea remains unused and abandoned after Germany halted the process of its certification due to the current crisis in Ukraine.

Until now, Germany did not have any liquefied natural gas terminals. For this reason, the country will spend €2.5 billion to hire and operate the floating LNG terminals. The funds will be used to operate the terminals for the next ten years and ensure the necessary infrastructure on land.

The charter agreements are said to be signed already this week.

As Offshore Energy recently reported, the terminals will be located in Brunsbüttel and Wilhelmshaven. Additional locations are being examined.

“The first floating terminals are yet to come. We are currently still examining the nautical and licensing options for landing the terminals, i.e. the question of where exactly they are located. It is well known that we mainly check in Brunsbüttel and Wilhelmshaven. But in general, we also check other locations. In fact, we are working flat out and trying to implement it as soon as possible,” Susanne Ungrad, press officer for energy policy and industrial policy at the Federal Ministry for Economic Affairs and Climate Action, said during a press conference on 13 April.

The project will make it possible for ships to deliver LNG directly to Germany via the floating terminals. The first deliveries are expected in the next winter 2022-2023 season.

When asked whether these floating terminals are meant to be a permanent or an interim solution, Ungrad explained:

“It can only be an interim solution because we want to phase out gas in the medium term. So it can’t be a permanent solution.”

She added that there are talks with RWE and Brunsbüttel about a permanent terminal. Further talks are also ongoing.

Environmentalists warn of new “fossil traps“

Environmental Action Germany (Deutsche Umwelthilfe), a non-profit environmental and consumer protection association, has criticised the recent move by the government.

According to this association, more transparency is needed with the new strategy with LNG terminals.

“The federal government invests billions of euros in tax money in importing liquefied natural gas from all over the world but does not put the facts on the table. It is still unclear whether there is any need for LNG terminals at all,” Sascha Müller-Kraenner, Federal Managing Director of the association, pointed out.

“Both the planned capacities and the specific locations are unclear to date. We demand full transparency from the federal government about the capacity and period for which these terminals should be designed and which locations are suitable.”

“Large-scale projects that are harmful to the climate, such as new fossil gas terminals, must be examined for their environmental and climate impact in a public and transparent process. Quality comes before speed here – otherwise Germany will fall into a fossil trap that creates new dependencies and endangers the climate goals,” he concluded.

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