LNG

The German Association of Transmission System Operators (FNB Gas) said that had been a “significant easing of the supply situation” and Germany was looking forward to natural gas energy security in the future.

The German Association of Transmission System Operators (FNB Gas) said that members were seeking more capacity reservations and capacity expansion for pipelines as well as more sector benefits from imported and regasified LNG and from power plants in accordance with the new gas industry framework for Germany.

Sonatrach, the Algerian national energy company, has signed a supply contract for pipeline natural gas to be delivered to Germany via pipelines to southern European as the Germans now appear to be less enthusiastic about replacing Russian gas with LNG imports from the US and Qatar.

The pipeline gas agreement was signed during a visit to Algiers by German ministers and is with Leipzig-based VNG Handel & Vertrieb GmbH, a wholly owned subsidiary of VNG AG.

The VNG group is involved in energy trading and sales as well as natural gas and energy transportation by pipeline and gas storage. 

No details were released on the length of the supply contract nor on the volumes of natural gas Algeria would be delivering to Germany from its output of more than 100 billion cubic metres per annum.

Sonatrach, the national oil and gas company with two LNG export plants at Arzew and Skikda on the Mediterranean Coast as well as gas pipelines connected to Spain and Italy, said the deal was signed at a ceremony chaired by Algeria’s Minister of Energy and Mines Mohamed Arkab.

Green-backed gas deal

The signing of the VNG natural gas deal was also witnessed by the visiting German Vice-Chancellor and Federal Minister of Economic Affairs and Climate Action, Robert Habeck, who is a member of the left-wing Green Party in the three-party German coalition government.

Rachid Hachichi, the Chief Executive of Sonatrach and his VNG counterpart Ulf Heitmüller spoke at the signing ceremony.

“I must express my satisfaction with the strengthening of the energy partnership with Europe through this historic contract with the company VNG, which will lead to the start of natural gas deliveries to Germany,” stated Hachichi.

Ulf Heitmüller, the CEO of VNG, said he was delighted to have been able to conclude a medium-term gas supply contract with Sonatrach.

“VNG thus becomes the first German company to purchase gas via pipeline from Algeria,” Heitmüller added.

Energy partnership

“This contract lays the foundations for a relationship of trust in terms of supply, opens new perspectives and strengthens the German-Algerian energy partnership,” stated the VNG CEO.

VNG’s Heitmüller added that Algerian natural gas would now be “an essential part” of guaranteed energy security for Germany,

“The purchase of Algerian gas via pipeline to Germany constitutes an additional diversification of VNG's purchasing portfolio, thus strengthening its position as a reliable partner towards its customers and making the company an important contributor to security of supplies,” Heitmüller declared.

Denmark and Sweden, whose electricity systems have been interconnected for more than 100 years, have signed a natural gas supply agreement to be implemented in case of emergencies with the Danes pledging to supply Swedish essential services with gas.

The Nordic nations have entered into a “solidarity agreement “ on gas supplies signed by the Director General of the Swedish Energy Agency, Robert Andrén, and the Director of the Energy Agency of Denmark, Kristoffer Böttzauw.

“The agreement will come into force if an emergency situation arises, where the energy crisis escalates and gas shortages occur in the coming winters,” said a statement.

“In that case, Denmark will contribute to securing the supply of the protected customers in Sweden. This applies, for example, to households, hospitals, emergency services and other critical functions,” according to the agreement.

Small-scale LNG

While Sweden is a small-scale LNG importer of around 400,000 tonnes per annum for bunkering fuel and other uses, Denmark has the key pipeline links to North Sea natural gas supplies.

Andrén, the Sweden’s Energy Agency head, explained that their energy systems were complex and connected to several countries.

“The agreement shows the strength of international cooperation, especially for security of supply, where the benefits of cooperation are obvious,” added Andrén.

The backbone of the regional gas infrastructure is the Danish transmission system, which transport natural gas from the North Sea to distribution networks on land.

Danish state-owned firm Energinet operates the transmission system in Denmark and the system is also the route to Germany and Sweden and to the two Danish gas storage facilities, which are consolidated in a separate company owned by Energinet.

“The agreement we have signed reflects the great work and cooperation that has taken place in the wake of Russia's invasion of Ukraine - not just in the Nordic region, but throughout the European union,” said Kristoffer Böttzauw, director of the Danish Energy Agency.

Team work

“No country in the EU or the Nordics can solve the energy supply crisis alone. So we must cooperate and be in solidarity with our neighbours - both when it comes to supply chains and energy savings,” added Böttzauw.

The Danish and Swedish sides noted that Russia's invasion of Ukraine has strained gas supplies across Europe causing large fluctuations in energy prices.

“Although electricity and gas prices have fallen since the summer of 2022 and the European gas storages have a very high degree of filling, there is still a lot of work to be done to ensure security of supply,” they said.

“The solidarity agreement shows the effect of the strong Nordic cooperation to ensure security of supply, where both countries benefit from close cooperation in both the electricity and gas fields,” they added. 

Equinor, the Norwegian state energy company and supplier of pipeline natural gas and LNG to Europe, has won 26 new production licences from Norway’s Ministry of Petroleum and Energy in the latest awards for predefined areas.

The awards included 18 licences with Equinor as operator and eight others as a partner to various other energy players.

“The rounds are important, and we are very pleased with the awards,” said Jez Avery, Equinor’s senior vice president for subsurface in Exploration & Production in Norway.

Equinor noted that as the production from existing oil and gas fields declines continued exploration and replenishment is essential to maintaining long-term, important energy deliveries from Norway.

The company said that its analyses show that active exploration activity is the most important single measure to ensure continued value creation towards 2030 and beyond.

Three basins

Equinor's production licences are divided into 16 in the North Sea, nine in the Norwegian Sea and one in the Barents Sea.

The company plans in 2023 to participate in 25 exploration wells, most of them around existing infrastructure.

“Around 80 percent of the exploration wells will be drilled in known, mature areas,” explained Averty

“Discoveries near existing infrastructure require less volume to be commercially developed and can be quickly put on stream and with low carbon-dioxide emissions,” he said.

“We thus maximize the value creation from existing infrastructure that has been developed over a long period on the NCS,” the Equinor executive added.

“Exploration is essential to our ambition to transform the NCS from and oil and gas province to a broad energy province,” he stated.

In total the Ministry offered 47 new production licences in the latest NCS licensing round.

“I was able to offer 47 new production licenses in the predefined areas to a wide variety of companies. Further exploration activity and new discoveries are important to maintain the production of oil and gas over time, both for Norway and Europe,” stated the Minister of Petroleum and Energy Terje Aasland.

The 47 production licenses offered in this year's round are distributed over the North Sea (29), the Norwegian Sea (16) and the Barents Sea (2).

A total of 25 different oil and gas companies, from large international companies to smaller Norwegian exploration companies, were offered shares in one or more of these licences and 12 companies were offered one or more operatorships.

Natural gas demand growth in China, including LNG deliveries, is forecast to slow considerably, falling to 2 percent per annum between 2021 and 2030 compared with an average growth rate of 12 percent per annum between 2010 and 2021.

Germany said Chancellor Olaf Scholz would discuss energy supplies, including possible LNG shipments, when he begins a tour on September 25 of the Arabian Gulf states.

A statement said that Scholz was scheduled to visit three countries Saudi Arabia, Qatar and the United Arab Emirates.

“The gas offering is slowly broadening,” said German Economics Minister Robert Habeck while visiting the Baltic Coast town of Lubmin.

Lubmin is in the German state of Mecklenburg-Vorpommern and came to prominence in the gas business by being a landfall for the cancelled Nord Stream II natural gas pipeline under the Baltic from Russia.

Nord Stream II would have doubled German pipeline imports from Gazprom, though the completed project was blocked by the European Commission and also by Chancellor Scholz’s new coalition government that won the elections in September 2021.

Lubmin will now become one of four coastal hubs for LNG imports from the US, other European countries and possibly Qatar and the UAE.

“We must show that in times like these, we can plan, authorize and build faster than is usually the case in Germany,” said Habeck on the plan to site a floating storage and regasification unit at Lubmin.

Habeck is also Vice Chancellor and a member of the Green Party.

Start-ups

The operators of the Lubmin FSRU to be chartered by the German Government is aiming for an operational start-up by the end of 2023.

Germany’s opposition parties that won power before the events in Ukraine have mostly been against using natural gas.

The country was also one of the few leading European Union economies without LNG infrastructure, though one terminal was planned on the Elbe River but constantly opposed and demonstrated against as recently as last year by Habeck's Green Party and its supporters.

They quickly changed their minds on LNG after the gas crisis erupted and it was deemed to be a “transition” fuel by the panicked European Commission late in the day in 2022.

Other German LNG import terminal plans include a mixture of FSRUs and onshore facilities, though a final project list has yet to be published.

Among those advancing is an FSRU venture and a possible onshore facility at the port of Stade on the Elbe River backed by state government of Lower Saxony and by a development company, Hanseatic Energy Hub GmbH.

German is acquiring at least five FSRUs to move away as fast as possible from dependence on Russian pipeline natural gas from Gazprom.

The Stade seaport is situated on the Elbe sea-lane between Hamburg and the Elbe estuary at Cuxhaven and is close to the North Sea.

Chancellor Scholz said in a speech on September 13 that a series of planned new LNG import facilities would be ready for imports by the end of 2023.

He expected facilities to be developed quickly at the North Sea port of Wilhelmshaven and at Brunsbüttel, located south of Hamburg on the Elbe River and near the entrance to the Kiel Canal.

According to the German government, Wilhelmshaven will become the first LNG hub. Brunsbüttel will be the second to be completed and is backed by the Government, German utilities and the Dutch utility Gasunie.

The German Association of Gas Transmission System Operators (FNB Gas), which groups a dozen companies overseeing 40,000 kilometres of natural gas pipeline flows and other infrastructure, has published its development and implementation plan through 2030, including up to 200 gas projects and provisions for just two LNG import terminals.

Germany, the largest natural gas pipeline consumer in the European Union and a future LNG importer, is set to be the first country to end both nuclear and coal power under an agreement to compensate workers, companies and regional governments as it switches off coal-fired plants by 2038.

The German oil and gas company Wintershall DEA said it had secured interests in nine new exploration licenses in Norwegian waters, including three as operator, as Germany continues to have only modest LNG import ambitions and aims to boost its pipeline volumes in the long term.