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.  

Dutch utility Gasunie, whose network and assets include over 17,000 kilometres of pipelines in the Netherlands and Germany as well as stakes in Dutch and German LNG import facilities, reported a plunge in first-half earnings as the Dutch continued to show dependence on LNG amid the green obsessions and over-regulation of the European Union.

June 26 (LNGJ) - Gasunie, the Dutch utility and LNG terminals owner in the Netherlands and Germany, has had Diederik Samsom appointed as the Chairman of the Gasunie Supervisory Board by the Dutch Ministry of Finance.

   Samsom is a former leader of the Dutch Labour Party and was the “chef de cabinet” to European Union Commissioner Frans Timmermans from 2019 to 2024. Samsom is an environmental activist and started his career at the radical group Greenpeace where he was campaign manager and joined after studying applied physics at Delft University of Technology.

June 24 (LNGJ) - Dutch utility Gasunie and storage group Royal Vopak may keep the Eemshaven LNG import facilities at the Groningen port in the Netherlands for longer than planned either for their continued use for LNG or other possible uses such as hydrogen or carbon-capture and storage projects.

   “In partnership with the Ministry of Economic Affairs and Climate Policy, Gasunie and Vopak are exploring options to keep operating the EemsEnergy Terminal for longer than initially planned,” said a statement. “This survey will not only look at LNG but is also intended to explore ways to bring about a future, rapid transition to a sustainable energy system, where hydrogen and carbon capture and storage play key roles,” they added.

April 15 (LNGJ) - Gasunie, the Dutch utility and LNG terminals owner, said it was concluding new 10-year framework agreements with a selection of six contractors for the maintenance and management of existing natural gas pipelines and the construction of new pipelines for hydrogen, green gas and carbon-dioxide. “The energy transition leads to many new projects, where maintenance of existing infrastructure also remains crucial. The agreement includes maximum investments of around €4 billion ($4.25Bln) spread over a period of 10 years,” Gasunie explained.

   Janneke Hermes, Chief Financial Officer of Gasunie, said the agreement included “a new working method” that focuses on strategic partnership in the light of the energy transition. “We will invest large-scale in our core activity, the transport of energy, in the coming years,” Hermes added. “The focus of the investments is on maintaining a safe and reliable gas network,” she stated.

Dutch utility Gasunie, whose network and assets include over 17,000 kilometres of pipelines in the Netherlands and northern Germany as well as stakes in Dutch and German LNG import facilities, has explained its energy security plan now that the Groningen gas field in the Netherlands is no longer active and imports of Russian gas have almost ceased.

Gasunie noted that global demand for LNG also currently exceeds supply, which means security of supply is no longer a given.

The utility said that Gasunie Transport Services (GTS) was being assigned the statutory duty to give annual advice on the security of natural gas supply and has drawn up a plan that was being presented to the Dutch Ministry of Economic Affairs and Climate Policy.

“The GTS vision emphasises the importance of proactive measures to guarantee the security of natural gas supply in the short and long term, while factoring in the challenges presented by the current market and changing climatic conditions,” Gasunie explained.

“The vision still features an important role and responsibility for market parties, but does propose several extra market rules allowing for intervention if deemed necessary to guarantee security of supply,” the report added.

Gasunie has LNG import facility stakes in the Dutch Gate terminal in Rotterdam and the Eemshaven import hub in Groningen,

The utility is additionally involved in the German natural gas market and in developing the onshore LNG terminal in Brunsbüttel on the Elbe.

Guarantees

“A continuous sufficient gas supply and well-filled gas storage facilities for the winter periods are needed to guarantee security of supply,” said the report.

“The Netherlands currently depends on imports for 75 percent of its gas consumption,” it noted.

“Given the closure of the Groningen field and declining domestic production, this dependence will become even greater,” Gasunie stated.

“The Netherlands would therefore benefit from a well-functioning European internal gas market as would other EU member states,” the utility added.

There are also now likely to be additional statutory measures in the 27-nation EU to fill gas storage facilities.

As of mid-2022, supply from Russia to northwest Europe ceased almost entirely.

This is being compensated for by maximum pipeline gas imports from Norway and maximum LNG supply through the Gate terminal and the EemsEnergy Terminal throughout the year.

“This supply covers basic demand, but can barely make an additional contribution in winter,” said Gasunie.

“Since LNG supply is stable over the course of the year, it is not sufficient to allow for seasonal flexibility. All in all, this means that seasonal storage facilities will be the primary source of seasonal flexibility in the years to come, even more so than in previous years,” Gasunie declared.

Gasunie explained that although market parties determined the flows of gas flows, commercial motives were sometimes at odds with guaranteeing security of supply.

Statutory measures

Several additional statutory measures are, therefore, proposed such as establishing a statutory standard filling level for seasonal storage facilities that market parties need to adhere to.

This could also see the government designate a party to act as back up in the event that the market parties do not meet their obligations on time.

“To create sufficient supply for the long term, expanding LNG import capacity, as is currently happening at Gate and the German terminals, remains crucial for security of supply. Existing LNG plants will also need to remain available,” said Gasunie.

Gasunie warned that if the coming winters were colder than average, seasonal storage facilities would be empty quicker and that would mean that there would be “a realistic chance” of insufficient supply capacity volumes to fill seasonal storage facilities back up to the standard filling level.

“In close collaboration with the Ministry of Economic Affairs and Climate Policy and other relevant stakeholders, GTS is making every effort to create a sustainable and reliable gas supply for the Netherlands,” Gasunie concluded.

RWE AG, the German utility that developed the existing Brunsbüttel floating terminal on the Elbe and also has a 10 percent stake in the German LNG Terminal onshore terminal joint venture being built at Brunsbüttel, has changed some management roles at RWE Supply & Trading ahead of the departure of RWE Chief Executive Andree Stracke.

Contrary to what is suggested in the political discussions, it is hardly the price of gas that increases the price of electricity, themain driver now in the European Union and particularly in Germany is the carbon-dioxide (CO2) price that gas-fired and coal-fired power plants have to pay for their emissions. 

Gasunie, the Dutch utility and owner of stakes in the Dutch Rotterdam and Eemshaven LNG import terminals and the onshore German regasification project  planned for Brunsbüttel, posted increases in first-half net profits and revenues as natural gas markets evolved after the ending of Russian pipeline flows.

Gasunie, the Dutch utility and co-owner of the Rotterdam and Eemshaven LNG import facilities and a stakeholder in the onshore German regasification facility planned for Brunsbüttel, has named Willemien Terpstra as the next Chief Executive and Chairwoman of the Board.