LNG

LNG is a controversial topic in Germany: Green paint was thrown at the back entrance of Berlin’s luxury Hotel Adlon at the opening day of the Global LNG Summit while Stefan Wenzel, state secretary to Germany’s economy minister Robert Habeck spoke just prior to a panel with top executives from Cheniere Energy, ADNOC Gas, Shell and bp.

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.

May 23 (LNG) – Germany is planning new interference measures in energy markets. The country’s Minister for Economic Affairs and Climate Action, Robert Habeck, who represents the anti-capitalist Greens party in the Social Democrat-led coalition government, plans to introduce more left-wing measures by giving €4 billion ($4.3Bln) of permanent subsidies a year to energy-intensive industries in Germany.

   However, the German Finance Ministry opposes Habeck’s interference in power and commodity markets and the current budget does not allow funds to be redirected to give subsidies to about 80 percent of Germany’s industrial sector. “This price will be calculated on the basis of the average exchange electricity price and then calculated down,” Habeck said. Analysts said that Germany was emerging as a leader of the European Union’s gradual move towards an anti-competitive grants and subsidies economy.

The German Federal Government enjoyed full public support for floating LNG terminals fast-tracked in 2022 and early 2023 for North Sea, Elbe River and Baltic port projects, though is now facing opposition for a fifth out of six proposed floating storage and regasification units (FSRUs) to be deployed at Rügen, Germany’s largest island in the Baltic Sea.

German Chancellor Helmut Scholz has led an inauguration ceremony for the nation’s first LNG floating storage and regasification unit (FSRU), the “Höegh Esperanza”, at the North Sea port of Wilhelmshaven.

German LNG Terminal GmbH, the development company of the onshore import facility at Brunsbüttel on the Elbe River south of the port of Hamburg and adjacent to the Kiel Canal, has signed up three leading energy companies as long-term foundation customers for regasification capacity.

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 government has selected a consortium to jointly develop and deploy a fifth floating import facility offshore the leading European Union economy for liquefied natural gas to replace Russian pipeline gas volumes.

The German Government has warned of a serious power situation in the country after a decision by Russian natural gas company Gazprom to cut flows further by 50 percent on the Nord Stream I pipeline, reducing overall capacity to just  20 percent from July 27.

German LNG Terminal GmbH, the developer of the Brunsbüttel import terminal on the Elbe River south of Hamburg, welcomed the planning status accorded by the Federal Minister for Economic Affairs and Climate Action Robert Habeck for the development of energy import infrastructure across northern Germany.