LNG

Equinor of Norway has signed a new agreement starting immediately to supply German utility and LNG market participant RWE with pipeline natural gas.

The German Association of Gas Transmission System Operators (FNB Gas) said its members had been working flat out to provide initial answers to the new economic conditions for natural gas, including the introduction of LNG imports after the Russian invasion of Ukraine.

German LNG Terminal, the joint venture company developing the European nation’s first regasification facility at Brunsbuettel on the Elbe River near the port of Hamburg, said it has started the engineering, procurement and construction pre-qualification tender process.

The company said potential EPC contractors who make known their interest in bidding for the project on or before 1st July 2019 will receive a pre-qualification package.

Binding lump-sum offers will have to be prepared and submitted by pre-qualified bidders between August and October 2019.

The winning bidder will be announced during the first quarter of 2020, followed by the release of an early or limited notice to proceed to commence scheduled early activities.

The Brunsbuettel project is a joint venture involving two Dutch companies, natural gas operator Gasunie, global storage company Vopak as well as German energy firm Oiltanking GmbH, a subsidiary of the Marquard & Bahls AG of Hamburg.

RWE, one of Europe’s leading energy companies and utilities based in the German city of Essen, has already booked “a considerable part” of the capacity from the planned terminal.

Germany is the only major European Union nation without LNG import facilities and has come under political pressure from partners in Brussels and other allies to accept North American LNG in competition to Russian pipeline gas as part of the EU bloc's energy security policy.

The joint venture plans to build, own and independently operate a combined import and distribution LNG terminal in Brunsbuettel.

“The terminal’s business model is characterised by the provision of multi-purpose services as well as open access to terminal capacity,” explained the developers.

They pointed out that Brunsbuettel benefits from several advantages:

a) Its location near the North Sea along the Elbe river, and close to the Kiel Canal and therefore its easy access to markets in North-West Europe, Scandinavia and the Baltics;

b) The close proximity to the port of Hamburg with according LNG bunker potential;

c) The location is within the ChemCoast Park that includes industrial customers with high energy needs; and

d) There is strong support of both local and regional government. In addition, the German federal government supports an LNG terminal as it contributes to gas supply diversification and provides efficient supply chains for LNG as an alternative fuel.

“The market’s reaction to the Brunsbuettel terminal project has been positive with interest from future customers reflected in the execution of several Heads of Agreements,” said the German LNG Terminal company.

The application for exemption from regulated third-party access and the permit application are based on terminal capacity of 8 billion cubic metres per annum.

The developers said that it was envisaged that up to four EPC Contractor entities will be pre-qualified to enter the competitive tender process.

“Experience in design and construction of similar projects and awareness of German codes and practices will be essential attributes to pre-qualify, besides financial strength and safety track record,” said the German LNG Terminal company.

Uniper, the German energy company and utility, launched an open season in May 2019 to test interest in another German LNG import terminal project planned for the North Sea port of Wilhelmshaven.

Uniper said it would test the interest of natural gas companies in using its planned facility and was looking for a partner to be the operator.

Dusseldorf-based Uniper said the proposed terminal would use a floating storage and regasification unit to handle around 7.5 million tonnes per annum of LNG and customers had until July 19 to express an interest.