LNG

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

Trading Hub Europe GmbH, Germany’s market area manager for the nation’s natural gas system and now including deliveries to three LNG import destinations, has issued its latest report on the calculation basis for accounting charges and liquidity buffers in the German natural gas market.

Deutsche ReGas GmbH, the German owner of the floating LNG terminal at the Baltic port of Lubmin, and German Transmission System Operator, Gascade GmbH, are organising a “town hall” event to try and clear the way for the fifth out of six proposed floating storage and regasification units (FSRUs) to be deployed off Mukran Port on Rügen, Germany’s largest island in the Baltic Sea.

The Ministry of Economics is determined that at least one of the six government-chartered FSRUs be deployed at Rügen, near Lubmin, before winter 2023 to handle an additional five billion cubic metres per annum of regasified LNG .

The plans call for import facilities to be established off the southeast cost of Rügen several kilometres from the resorts of Sassnitz and Ostseebad-Blinz.

This Rügen FSRU plan has led to opposition and some demonstrations from locals backed by Green party activitists who believe that the replacement energy sources for halted Russian pipeline gas would harm the tourist industry on the island in what was a part of the former East Germany.

Deutsche Regas and Gascade have called the public meeting for the town of Ostseebad-Binz on June 20 as imports are due to start before the end of the year.

Progress

As part of efforts to replace lost Russian pipeline gas supplies, the German government has been installing LNG terminals along its coast with the first to start operations in January 2023 being the Deutsche Regas terminal at Lubmin.

The facilities at Lubmin are about 40 nautical miles from Sassnitz and Mukran port that are part of the German federal state of Mecklenburg-Western Pomerania.

As 2023 has progressed, Berlin has inaugurated several other FSRUs at the North Sea port of Wilhelmshaven and at Brunsbüttel on the Elbe River.

The floating LNG terminals import gas mainly from the US and Qatar and the volumes are delivered into the German energy grid and beyond.

There are also plans for some of the FSRUs to be replaced by permanent onshore regasification facilities as in Brunsbüttel.

Deutsche Regas has advertised the town hall-style gathering on its Web site proclaiming “citizen information event about the LNG terminal in Mukran”.

The event has been scheduled for Tuesday, June 20, at 5 pm local time at the Kurhaus-Saal venue near Schillerstraße in Ostseebad-Binz.

“All are welcome and a project presentation will start at 5:45 pm followed by a questions and answers session with the end of the event scheduled for 7:00pm,” said Deutsche Regas and Gascade in their invitation.  

Open Season June 29

Deutsche Regas is trying to clear the way for the June 29 Open Season launch for Phase II capacity of the LNG terminal expansion to Mukran port.

“In Phase II, it is planned to operate the floating LNG terminal consisting of two FSRUs in the port of Mukran from December 2023 and to connect it to the gas pipeline network via a new connecting line between Mukran and Lubmin,” explained Deutsche Regas in a statement.

“In Phase II, the planned annual throughput capacity for natural gas is up to 13.5 billion cubic metres,” it added.

Gascade was involved in helping with the development of the Deutsche Regas FRSU terminal at Lubmin.

In just a few weeks, Gascade completed the pipeline link to the gas landfall at Greifswald with connections to the NEL (North European Natural Gas Pipeline), OPAL (Ostsee-Pipeline-Anbindungsleitung) and EUGAL (European Gas Pipeline Link) connections to the gas grids of the rest of Germany and the European Union.

French and Spanish engineering companies have been awarded the contract for the onshore LNG import terminal being developed at Brunsbüttel on the Elbe River north of Hamburg.

The price cap on Russian crude oil backed by the 27-nation European Union and the G7 group of leading western economies entered into force on December 5 and may have an impact on other energy markets and prices.

In addition to the price cap on Russian crude the EU-G7 coalition will cap prices of petroleum products such as gasoline from February 5 in 2023.

“The cap has been set at a maximum price of $60 per barrel for crude oil and will be adjustable in the future in order to respond to market developments,” said a statement on December 3 from the European Commission in Brussels.

“This cap will be implemented by all members of the Price Cap Coalition (EU and G7) through their respective domestic legal processes,” the Commission added.

The price cap, which comes on top of the EU import ban on Russian seaborne crude oil and oil products and the corresponding bans of the G7, is aimed at reducing the revenues Russia earns from oil as a sanction against the invasion of Ukraine in February 2022.

The G7 nations include the EU countries of France, Germany and Italy in addition to the US, Canada, Japan and the UK.

These measures apply to Russian crude oil falling under CN code 2709 00 and Russian petroleum products falling under CN code 2710.

Exceptions

“There is a 45-day wind-down period for seaborne Russian crude oil purchased above the price cap, provided it is loaded onto a vessel at the port of loading prior to 5 December 2022 and unloaded at the final port of destination prior to 19 January 2023,” the Commission explained.

“Maritime-related services and maritime transport can be provided during this period. There is no equivalent provision for petroleum products,” it added.

The Commission stated that “the EU's sanctions against Russia are proving effective and are damaging Russia's ability to manufacture new weapons and repair existing ones” as well as hindering its transport of material.

“The geopolitical, economic, and financial implications of Russia's continued aggression are clear, as the war has disrupted global commodities markets, especially for agrifood products and energy,” added the Commission.

The statement explained that the crude oil cap did not affect the full EU import ban on Russian crude and petroleum products and the specific exceptions and derogations which were already agreed in previous sanctions packages.

“These exceptions and derogations allow certain EU Member States to continue importing crude oil and petroleum products from Russia due to their specific situation or to import seaborne crude oil from Russia if the supply of crude oil by pipeline from Russia is interrupted for reasons beyond their control,” said the Commission.

“Specific projects which are essential for the energy security of certain third countries may be exempted from the price cap,” it added.

Analysts explained that while the EU's ban on importing Russian seaborne crude oil and petroleum products remains fully in place, the price cap will allow European operators to transport Russian oil to third countries, provided its price remains strictly below the ($60) cap.

“The price cap has been specifically designed to reduce further Russia's revenues, while keeping global energy markets stable through continued supplies,” said the Commission.

“It will, therefore, also help address inflation and keep energy costs stable at a time when high costs - particularly elevated fuel prices - are a great concern in the EU and across the globe,” it declared.

Qatar Petroleum and German utility Uniper are in firm talks on the supply of LNG by Qatargas to the proposed import terminal at the North Sea port of Wilhemshaven in the state of Lower Saxony.

Gaztransport and Technigaz (GTT), the French technology firm for designs of systems for the maritime transportation and storage of liquefied natural gas, said it had completed an LNG terminal and bunkering training simulator for the Maritime Training Centre in Hamburg to develop personnel skills before Germany makes its debut as an importer and maritime fuel supplier.