LNG

The BP 2024 Energy Outlook said that liquefied natural gas demand would grow robustly in the near term, driven by increasing needs in emerging economies in Asia as well as in the regional economic powerhouse China.

Tree Energy Solutions (TES), the future energy hub developer at the German North Sea port of Wilhelmshaven, said regulators had exempted the planned onshore liquefied natural gas terminal within the “Green Energy Hub” from tariff and third-party access regulations for a period of 20 years from the start of operations.

The bankruptcy procedure for Nord Stream II AG, the Swiss-based operator of the Nord Stream II gas pipeline from Russia to Germany under the Baltic Sea, was extended by six more months until July 2023, according to the Swiss Official Gazette of Commerce.

The International Energy Agency (IEA) said it carried out new analysis and identified a challenging 30 billion cubic metres supply-demand gap in the 2023 Northern Hemisphere summer season.

The Paris-based IEA said that the gap would occur at a key time for refilling European Union storage as Russian volumes remained cut off and Chinese LNG imports began to rebound for the 2022 drops.

The IEA repeated its support for governments taking measures to reduce natural gas consumption amid the global energy crisis.

The new report is called “Never Too Early to Prepare for Next Winter: Europe’s gas balance for 2023-2024”.

It states that gas storage sites in the EU are now 95 full and putting them 5 percent above the five-year average fill level.

However, the report cautions that the cushion provided by current storage levels, as well as recent lower gas prices and unusually mild temperatures, should not lead to overly optimistic conclusions about the future.

Filling

“The process of filling EU gas storage sites this year benefitted from key factors that may well not be repeated in 2023,” explained the IEA.

“These include Russian pipeline gas deliveries that, although they were cut sharply during 2022, were close to ‘normal’ levels for much of the first half of the year,” added the report.

“Total pipeline supply from Russia to the EU in 2022 is likely to amount to around 60 Bcm, but it is highly unlikely that Russia will deliver another 60 Bcm of pipeline gas in 2023 and Russian deliveries to Europe could halt completely,” stated the IEA.

The agency noted that China’s lower LNG imports in the first 10 months of this year have been a key enabler of higher LNG availability for Europe to compensate for the drop in gas deliveries from Russia.

“If China’s LNG imports recover next year to their 2021 levels, this would capture over 85 percent of the expected increase in global LNG supply,” noted the IEA.

“And global LNG supply is expected to increase by only 20 Bcm in 2023, with about one-third of the growth coming from the United States,” said the report.

“The expected rise in global LNG supply next year is about half the average increase during the 2016-2019 period and much less than the likely decline in Russian pipeline deliveries to the EU next year,” it declared.

The IEA Executive Director Fatih Birol commented that with the recent mild weather and lower gas prices, there is a danger of complacency on Europe’s gas supplies,.

“When we look at the latest trends and likely developments in global and European gas markets, we see that Europe is set to face an even sterner challenge next winter,” he stated.

Russian President Vladimir Putin and the head of Gazprom have held talks in Vladivostok with Mongolian Prime Minister Luvsannamsrai Oyun-Erdene at the Russian-organized Eastern Economic Forum amid efforts by Russia to push forward with a natural gas pipeline to China across Mongolia, which is sandwiched in Central Asia between both big powers.

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.

Gazprom, the state-backed Russian natural gas company, has signed project finance documentation with more than 20 global banks for the domestic part of the “Power of Siberia” venture transporting pipeline natural gas to China in competition to LNG.