Germany to build LNG terminal in 'gesture to U.S.'

BRUSSELS (Reuters) - Germany will chose where to build a new liquefied natural gas (LNG) terminal by year end’s in what its economy minister on Tuesday called “gesture” to the United States.

In a bid to urge U.S. President Donald Trump to forgo hefty new trade tariffs on European Union imports, the bloc’s chief executive promised in July to work to increase imports of U.S. soybeans and LNG to the bloc.

Trump wants U.S. LNG to rival Russian natural gas exports in Europe. He has accused Germany of being a “captive” of Moscow, calling for it to drop support for the $11 billion Nord Stream 2 pipeline to pump gas directly from Russia under the Baltic Sea to its shores.

“This is a gesture to our American friends,” Peter Altmaier said of plans for where to build the LNG terminal. “We have three competing cities and we will take a decision before the end of the year.”

He said the move was unrelated to Germany’s support for Nord Stream 2, casting the pipeline as a commercial project that had been decided long ago.

“Nord Stream 2 is a project that has a long life already and much money has been invested,” he told reporters.

Altmaier spoke after a meeting with the EU’s energy chief at which the two discussed issues related to future gas transit via Ukraine - the traditional route for Russian gas supplies which make up more than a third of the EU’s needs.

Critics of the Nord Stream 2 pipeline say it will deprive the struggling EU-ally of lucrative gas transit fees and increase Russian gas monopoly Gazprom’s dominance.

Altmaier reiterated Germany’s request that Moscow continue to send “substantial” supplies via Ukraine after their contract expires in 2019 but did not put a figure on volumes.

“We have some problems with regard to the gas infrastructure in Europe,” he said. “We have private projects, but we have also some vital security interests of Ukraine.”

German firms are considering building an LNG terminal in Germany, as gas demand rises in Europe and the Netherlands, one of Germany’s crucial suppliers which is winding down its giant Groningen field and plans to close it in 2030.

 

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