LNG

A cooperation agreement has been signed between key natural gas infrastructure owners from Greece, the Balkans and Central Europe including Gastrade, developer of the Alexandroupolis floating LNG import terminal for Greece and the Balkans.

Former German Chancellor Angela Merkel has defended her natural gas and energy ties to Russia during her 16-year tenure, including the building of the Nord Stream II gas pipeline from Russia under the Baltic Sea to Germany where LNG will soon replace Gazprom supplies.

Fitch Ratings, the New York-based credit ratings agency and financial services company, has just published a report analysing the European Union’s efforts to mitigate the worst effects on gas markets of a cut-off of Russian imports and for their replacement with LNG and other types of energy.

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.

German LNG Terminal, the Dutch-led joint venture developing a planned liquefied natural gas import terminal at Brunsbuettel on the Elbe River near Hamburg, expects to make an investment decision soon after binding import contracts have been finalised at the end of 2020.

RWE, Germany’s largest utility and power producer and whose headquarters are in the city of Essen, confirmed that it had secured potentially 5 billion cubic metres of import capacity at Brunsbuettel as it also seeks a wider role for the facility.

“Currently the parties are in the final phase of negotiating fully binding legal contracts for LNG imports,” said RWE and German LNG Terminal in a joint statement.

“RWE and German LNG expect this process to be finalised by the end of 2020, putting German LNG in a position to reach a positive investment decision shortly thereafter,” it added.

German LNG Terminal is a venture comprising Dutch gas network operator Gasunie, German tank storage provider Oiltanking GmbH, and Dutch storage company Royal Vopak.

Gasunie and Vopak were the development companies behind the Dutch Gate LNG terminal at the port of Rotterdam.

RWE added that LNG import terminals like Brunsbuettel could also be combined with entry points for (liquid) hydrogen produced in other regions of the world where wind and solar energy are available at larger scale and lower cost than in Germany.

“Existing gas pipelines connected to the LNG terminal are perfectly fit to distribute hydrogen locally,” said RWE.

Javier Moret, Global Head of LNG at RWE Supply & Trading GmbH, said his company was an advocate of LNG.

“It can provide Germany with clean and affordable energy today and at the same time contribute to reducing emissions in the maritime and road transport sector as an alternative fuel,” added Moret.

“At the same time we want to make sure we are prepared for the next technological advancement. In the future hydrogen will play a key role as a climate-neutral fuel in the energy mix,” he explained.

“We are prepared for this next step with the new agreement. Therefore we are happy to support German LNG Terminal’s initiative in this field,” stated Moret.

Currently the parties are in the final phase of negotiating fully binding legal contracts for LNG imports.

RWE and German LNG expect this process to be finalised by the end of 2020, putting German LNG in a position to reach a positive investment decision shortly thereafter.

Another German utility, Uniper, is backing a second German import project at the deepwater North Sea port of Wilhelmshaven using a floating storage and regasification unit.
Uniper has said it expected that a competitive tender process would be conducted in the months ahead to seek binding accords with potential customers