The Federal Ministry of Economics considers five floating and three land-based LNG terminals to be necessary in order to ensure security of supply in Germany’s gas supply. In a letter to the budget committee of the Bundestag, the ministry has now presented an overall concept for the LNG infrastructure. Recently, various authorities have publicly questioned whether Germany needs so many LNG terminals to cover its gas needs.
In particular, the construction of land terminals was described as a wrong step in a paper by the German Institute for Economic Research (DIW) with a view to Germany’s planned climate neutrality. In November, the budget committee asked the ministry to submit an overall concept that also addresses investment and operating costs as well as the determined and forecast gas requirements. With a view to the destruction of the Nord Stream gas pipelines in the Baltic Sea, safety precautions were also asked to protect the new terminals.
Germany was caught unprepared
The Ministry’s statement shows that Russia’s war of aggression in Ukraine caught Germany completely unprepared in terms of energy supply. The shortage of gas supplies via Nord Stream 1 that soon set in and finally the shutdown in the summer called for quick solutions. Germany therefore chartered five FSRUs (Floating Storage and Regasification Units), floating LNG terminals, the first of which in Wilhelmshaven was able to start operations in 2022.
Which terminals are planned
In winter 2023/24, in addition to Wilhelmshaven and Brunsbüttel, a second floating terminal in Wilhelmshaven and FSRUs in Stade and Lubmin are to be launched. Another floating terminal in Lubmin that started operations this winter is a completely private project. The federal FSRUs are administered by the federal company Deutsche Energy Terminal. It also receives the income from the marketing of the regasification capacities, which flow back into the federal budget.
Land terminals are planned in Brunsbüttel, Stade and Wilhelmshaven. By the end of 2026, the terminal in Brunsbüttel, in which the federal government has a 50-percent stake, is to be up and running. The Hanseatic Energy Hub (HEH) in Stade is scheduled to go into operation in 2027, and a terminal in Wilhelmshaven that specializes in gas produced from renewable energies is scheduled to start in 2026. It is operated by the companies Tree Energy Solutions (TES) and Engie. However, the ministry warns that no final investment decisions have yet been made for any of the projects.
Why safety buffers are necessary
Among other things, the ministry is therefore anticipating safety buffers in order to replace the land terminals with the floating terminals if necessary. However, the overcapacity is also intended to prevent new dependencies from arising and, for example, another act of sabotage, for example on the pipeline between Norway and Germany, endangering the gas supply. This year, a maximum of around 13.5 billion cubic meters of natural gas could initially be imported via the LNG terminals. If all five federally chartered FSRUs are in operation in 2024 and 2025, up to 27 billion cubic meters of gas per year are possible. In Lubmin, Deutsche ReGas is also planning to expand its terminal to around 10 billion cubic meters per year from 2024. Together with the three land terminals, the LNG import capacity will increase to around 54 billion cubic meters – the land terminals will replace the respective FSRUs at the locations.
The German LNG terminals should not only cover Germany’s needs, but also import gas for other countries. A need is seen above all in the eastern neighboring countries of the Czech Republic, Slovakia, Austria, the Ukraine and Moldova. German gas demand, which was 99 billion cubic meters in 2021 and 82 billion cubic meters in 2022, is forecast to fall to a maximum of 74 billion cubic meters by 2030. Should it be even lower, there could be a flexible response by shutting down floating terminals. The Ministry rejects the fact that there is a commitment to fossil fuels, as criticized by climate and environmentalists. All land terminals are to be built “green-ready” so that they can later also process hydrogen, ammonia or synthetic natural gas.
What the floating terminals cost
Germany’s gas supply currently depends primarily on imports from Norway, which increased its deliveries by 15 to 46 billion cubic meters per year in 2022. 29 billion cubic meters are for Germany, the rest is transported to other countries by transit. Deliveries from the Netherlands and Belgium and the LNG terminals there also make a decisive contribution to the supply. In Germany, only 5 billion cubic meters are pumped every year. According to the ministry, the supply gap due to the failure of Russian deliveries is 28 billion cubic meters. By 2030, the gap will narrow to 13 billion cubic meters per year. As a result, gas storage and savings efforts continued to play a major role.
The Federal Government is planning a total of around 9.8 billion euros in costs for the chartering of the floating terminals and their structural connection by 2038. The charter rates for the FSRUs are a major cost factor. Costs of around 55 million euros are incurred per year and ship. The ministry makes little precise statements about the protection of the systems.