LNG infrastructure is growing – Scholz opens second terminal

LNG infrastructure is growing – Scholz opens second terminal

LNG terminal in Lubmin

The floating LNG terminal Neptun at the Baltic Sea port of Lubmin.

(Photo: Bloomberg)

Lubmin First Wilhelmshaven in Lower Saxony, now Lubmin in Western Pomerania – Federal Chancellor Olaf Scholz (SPD) wants to officially open the second German terminal for importing liquefied natural gas on Saturday. Mecklenburg-Western Pomerania’s Prime Minister Manuela Schwesig (SPD) is also expected to hand over the last outstanding permit to the operators. Federal Minister of Economics Robert Habeck is ill and will therefore not take part in the opening.

Like the terminal in Lower Saxony, the Lubmin plant stands for Germany’s efforts to create alternatives for the lack of Russian gas supplies. The terminals also stand for the high speed that those responsible have shown in setting up their own German import infrastructure for liquefied natural gas (LNG). The terminals were planned, approved and built within months.

had in previous years Germany obtained a large part of its natural gas via the German-Russian Baltic Sea pipeline Nord Stream 1. After throttling, nothing comes this way anymore. In addition, the line is like the sister line that never went into operation North Stream 2 severely damaged by suspected sabotage.

LNG is delivered by ship from several regions of the world, converted back into gas and fed into the gas network. In addition to a greater purchase of pipeline gas from Norway, for example, LNG is to replace missing Russian deliveries. As in Wilhelmshaven, a special ship takes on the LNG in Lubmin, converts it and feeds it in.

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These floating terminals could be put into position more quickly than fixed installations, which are also planned. The Confederation has chartered several floating terminals. Another will soon be launched in Brunsbüttel in Schleswig-Holstein.

Depending on local conditions, the floating terminals already in use or planned have a feed-in capacity of around five billion cubic meters of natural gas per year. Almost 60 billion cubic meters came via Nord Stream 1 alone in 2021. According to earlier information, Germany intends to cover around a third of its previous gas requirements via the floating LNG terminals in the winter of 2023/24. By then, more should start – for example in Stade in Lower Saxony and an additional one in front of Lubmin.

Criticism from environmental groups

Environmental groups have recently criticized the fact that Germany is creating long-term overcapacities for gas imports and is thus also hindering the desired phase-out of fossil fuels. The Federal Ministry of Economics had pointed out that there were also uncertainties in planned projects and that they wanted to create a safety buffer for possible failures. In addition, it is also about expanding the infrastructure at European level, from which other countries could also benefit.

While last year there were warnings of a gas shortage this winter, the scenario currently seems unlikely. Most recently, the gas storage facilities in Germany were still more than 90 percent full. Among other things, private households and businesses have reduced their consumption.

The filling levels usually decrease after the start of the heating period in autumn. On the morning of November 14, a fill level of 100 percent was recorded. On February 1, according to the Energy Industry Act, the storage tanks should still be 40 percent full. In the past year, direct Russian gas imports still played a role, at least temporarily. This shouldn’t be available until next winter. The weather is also an influencing factor. A harsh winter increases gas consumption. Temperatures have been comparatively mild lately.

Scholz in Wilhelmshafen

Parts of the federal government at the opening of the LNG terminal in Willhelmshaven a few weeks ago.

(Photo: IMAGO/Frank Ossenbrink)

According to the operator, the Lubminer Terminal is the only fully privately financed terminal in Germany to date. The company Deutsche Regas speaks of costs of around 100 million euros, which came from equity and from investors. At the beginning of the week, gas was introduced into the gas network for the first time as part of an approved test operation. In Wilhelmshaven, the time had already come at the end of last year. After receiving the actual operating license, gas can also be fed in beyond the previously applicable restrictions, according to Deutsche Regas.

The launches of the two terminals have been met with criticism. the German environmental aid (DUH) has already lodged an objection to the operating license for the terminal in Wilhelmshaven and is calling for the operating period to be limited from 20 years to a maximum of 10 years. The DUH also criticizes the discharge of waste water treated with biocides into the sea.

With a view to Lubmin, associations criticize what they see as a hasty approval and point out that there is currently no threat of a gas shortage. In her opinion, the effects on the protected Greifswalder Bodden, through which the tankers transport the LNG, were not sufficiently taken into account. There are also complaints from local residents about the noise they associate with the terminal. Authorities have already initiated measurements. Protests have been announced for the official opening on Saturday.

More: Europe’s imports make LNG scarce and expensive for emerging markets

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