LNG

Construction of an onshore LNG import terminal at Brunsbüttel is more expensive than expected, forcing Germany to support it with another €200 million in federal funding – on top of the €740 million initially committed. Broadcaster NDR reports total costs now surpass €1,5 billion, instead of €1.3 billion, with private investors having to shoulder most of the overrun.  

European utility E.ON whose main businesses in terms of volume span nations like Germany, the UK, the Netherlands and Eastern Europe reported a 33 percent plunge in first-quarter revenues, though swung to a quarterly net profit in the first three months of the year from a previous loss as the business was overhauled.

E.ON’s sales from January through March 2024 decline to €22.64 billion ($24.45Bln) from €33.54Bln in the first quarter of 2023.

Net profits at Essen, Germany-based E.ON came to €838 million compared with a loss of €72M in the first three months of 2023.

Earnings per share moved into positive territory at €0.22 per share from losses of €0.03 per share in the prior-year period.

Natural gas sales

Sales of natural gas to consumers declined to 63.4 billion kilowatt hours from 76.2Bln kWh in the first quarter of 2023.

E.ON’s first-quarter electricity sales dropped to 35.4 billion kilowatt hours from 40.9Bln kWh in the first three months of 2023.

E.ON has overhauled its business segments and the changes started in January 2024 whereby there are now three divisions, Energy Retail combining Energy Networks and Customer Solutions, while the Energy Infrastructure Solutions (EIS) is now a separate division that was carved out of Customer Solutions.

In addition, a number of regional markets at the Energy Networks division were reassigned.

This means that East-Central Europe and Turkey is now divided into East-Central Europe, including the Czech Republic, Slovakia and Poland and South Eastern Europe, taking in Hungary, Croatia, Romania and the E.ON stake in Enerjisa Enerji in Turkey.

Furthermore, the E.ON Group’s central commodity procurement unit, E.ON Energy Markets GmbH, is now part of Energy Retail from January 2024 after previously being part of Corporate Functions.

Bond sales

The German company listed among its highlights some successful bond sales of €3.3Bln and an arbitration proceedings against Spain.

The E.ON group, E.ON Financial and E.ON Iberia Holdings are plaintiffs in arbitration proceedings in which the three E.ON entities are asserting claims for damages for changes to Spain’s remuneration scheme for renewable energy.

“The E.ON Group’s sales in the first quarter of 2024 declined and in Germany this development is attributable in particular to the discontinuation of government subsidies for transmission network tariffs, which led to an increase in network tariffs in the first quarter of 2024,” the company explained.

“Higher sales in Sweden resulted from an increase in wheeling volume along with adjusted network tariffs due to improved regulatory parameters,” the company added.

In the power industry, wheeling is the delivery of energy from a generator to an end-user located in another area through the use of an existing distribution or transmission network.

“A decline in sales in South Eastern Europe is mainly attributable to a reduction in network tariffs that reflect lower procurement costs for network losses due to reduced electricity prices,” said E.ON.

The E.ON Group’s cash-effective investments of €1.28Bln in the first quarter of 2024 were 24 percent above the prior-year figure of €1.04Bln. The spending was on property, plants and equipment.

Customer data

The Germany company’s Energy Retail business has 47 million customers with the top three power markets being Germany 14M customers and 25 percent of sales,
the Netherlands with 4M customers and 24 percent of sales and the UK with 9M customers and 18 percent of sales.

E.ON also published energy statistics for key markets for 2023 compared with 2022.

German retail gas sales in 2023 amounted to 187.5 terawatt hours versus 179.2 TWh in the 2022, while UK gas sales were 66.3 TWh in 2023, down from 152.9 TWh in the 2022 as business structures also changed.

Natural gas sales in the Netherlands increased to 85.2 TWh from 74.5 TWh in the previous year.

E.ON, Europe's biggest operator of energy networks and with plans to enter the LNG import business in September with a floating storage and regasification unit delivered to the North Sea port of Wilhelmshaven, reported an increase in annual net income while also writing off its Nord Stream gas pipeline stake.

The bankruptcy procedure for Nord Stream II AG, the Swiss-based operator of the Nord Stream II gas pipeline from Russia to Germany under the Baltic Sea, was extended by six more months until July 2023, according to the Swiss Official Gazette of Commerce.

One of the companies involved in the German North Sea liquefied natural gas import project at Wilhelmshaven has announced an open season to fast-track LNG imports into Germany and the European Union.

German utility E.ON has formed a partnership with Belgian start-up Tree Energy Solutions (TES) to develop the North Sea facility and TES has announced the open season to gauge interest.

The Wilhelmshaven plan revolves around the construction of a new “green gas” terminal at the port which will initially accept shipments of mainly LNG to help reduce Germany’s reliance on Russian pipeline gas before a “green hydrogen” solution is safely developed by 2030 or later.

E.ON has signed a memorandum of understanding with Australian billionaire Andrew Forrest’s Fortescue Future Industries to import to Europe up to five million tonnes of “green hydrogen” from Australia or other locations by 2030.

Until then the North Sea facility will have to make do with LNG and TES has asked for LNG regasification capacities, shipment offers or other ideas in the consultation.

“The open season is accessible to all parties seeking to import LNG in the drive to reduce EU and Germany energy dependence on Russia,” said a statement.

Expressions of interest

“Parties are invited to submit an expression of interest to reserve capacity and services for the import of LNG volumes,” it added.

TES is planning for initial capacity to import up to 16-20 billion cubic metres per annum of natural gas from 2025 onwards.

The terminal will be connected through a pipeline to the European high-pressure gas grid.

“Terminal and pipeline capacity may be further expanded through the integration of further LNG tanks and commissioning of a second export pipeline,” it added.

“The expansion's timing and size will be determined by market demand for LNG imports from 2025 onwards, as well as the planned transition to green and clean, hydrogen-based gas,” it explained.

“To help decarbonise Germany and neighbouring markets, from 2027-2028 onwards, the Wilhelmshaven regasification terminal will, as part of the Wilhelmshaven Green Energy Hub, increasingly be reserved for imports of fossil-free green gas.,” it stated.

Six berths

According to the developers, the Wilhelmshaven terminal layout will ultimately comprise six ship berths, 1,600,000 cubic metres of onshore storage capacity using eight onsite tanks, of which four will be available during the initial stage.

The terminal also has plans to offer direct access to an extensive gas pipeline network, including existing salt caverns at Etzel and proximity to the Dutch Groningen gas grid infrastructure.

“The TES-Wilhelmshaven project is unique in accelerating Germany’s and Europe’s plans to decarbonise the energy market at scale whilst creating the opportunity to shift away from Russian gas imports as the way out of the current energy crisis,” said Otto Waterlander, Chief Commercial Officer at TES.

“The open season makes it possible to materially meet the needs of the market and will help provide energy security for Germany and the rest of Europe by accelerating the growth of green gas imports,” he added.

In a bid to reduce dependence on Russian gas, parliamentarians in Berlin are backing €2 billion in untied loan guarantees to help E.ON secure LNG from Canada's Goldboro venture and other long-term deals from projects in emerging markets.