Germany builds up LNG import terminals

(Reuters) - Deutsche ReGas has sub-chartered a second floating storage and reception unit (FSRU) for liquefied natural gas for the Mukran terminal project in the Baltic Sea, with its LNG to flow to onshore grids via the nearby port of Lubmin from next winter.

ReGas' deal to charter the Transgas Power vessel, which has regasification capacity of 7.5 billion cubic meters (bcm), is a step towards building up Mukran's Deutsche Ostsee terminal after its capacity was recently downsized following local opposition.

Germany's quest for to build up LNG import capacity has intensified as it seeks to end reliance on Russian pipeline gas after Russia invaded Ukraine last year. Pending the provision of fixed terminals, it is using FSRUs to help replace piped Russian gas supply.

Three FSRUs are working at Wilhelmshaven, Brunsbuettel and Lubmin after Germany arranged their charter and onshore connections in record time. Wilhelmshaven, Mukran and Stade are due to add more ships for the 2023/24 winter.

Industry and the government are also building up terminal capacity in anticipation of increased use of hydrogen, which when produced using renewable energy can help the transition to a lower carbon economy. Germany would need to import much of the hydrogen it needs.

Wilhelmshaven

Utility Uniper launched Germany's first FSRU operations last December at the deep-water port on the North Sea.

It plans to add a land-based ammonia reception terminal and cracker in the second half of this decade. Ammonia is sometimes used as a carrier for hydrogen, whose low density otherwise makes its transportation over long distances complicated.

Tree Energy Solutions (TES) will operate a second FSRU from later in 2023 for five years and plans to eventually convert the operations to clean gases.

Lubmin

The FSRU Neptune, chartered by Deutsche ReGas, began receiving LNG at Lubmin early this year. The gas is delivered to another storage vessel, the Seapeak Hispania, and shuttled to Lubmin in a set-up taking account of shallow water.

ReGas holds long-term supply deals with France's TotalEnergies and trading group MET.

The government wants the Neptune to join the Transgas Power in Mukran, allowing the Seapeak Hispania to depart.

However, gas grid company Gascade needs to link Mukran via Lubmin to the mainland gas grids, making it hard to narrow down the likely start date of the project more closely than to the three months from December to February next year.

ReGas will tender for supplies to Mukran from June 29.

Brunsbuettel

The Brunsbuettel FSRU, operated by RWE's trading arm on the North Sea coast, became operational in mid-April.

It is the forerunner of a land-based LNG facility that could start operations at the end of 2026, when an adjacent ammonia terminal could also start up. State bank KfW, Gasunie and RWE are stakeholders and Shell has committed itself to sizeable purchases.

Stade

The inland port on the river Elbe in January started work on a landing pier for an FSRU, to be ready in the winter of 2023/24.

Project firm Hanseatic Energy Hub (HEH) also plans a land-based terminal where it has allocated regasification capacity that could be operational in 2027, including volumes for state-controlled Sefe and utility EnBW.

It has begun sounding out the market to determine whether the longer-term plans should be based largely on ammonia to be reconverted into clean hydrogen. It has identified a construction consortium.

HEH is backed by gas network company Fluxys, investment firm Partners Group, logistics group Buss and chemicals company Dow. A final investment decision is expected in mid-2023.

EnBW, which is also a buyer at Wilhelmshaven and Brunsbuettel, said it would double annual purchases to 6 bcm.

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