Substitute for Russian supplies: how LNG is supposed to fill the gas gap

Today the construction of a new terminal for liquefied natural gas in Lubmin starts. LNG plants are also being built at other locations to compensate for Russia’s delivery freeze. How far along are the projects?

High bills and concerns about a lack of gas in winter: the energy crisis continues to have a firm grip on consumers and companies in Germany – and with it politics. In order to secure the energy supply and to be less dependent on gas supplies from Russia in the future, the federal government is focusing on savings and expanding the supply.

In addition to new delivery routes and the expansion of renewable energies, the import of liquefied natural gas (LNG) also plays a major role. However, special equipment is required to convert it to conventional natural gas. So far, Germany has not had its own terminals, but has obtained LNG via tankers from other European ports. Because the capacities there are overloaded, that should change. How many are planned and at which locations? Which ones are already under construction?

LNG should cover a third of the current gas requirements

Five state-owned LNG terminals, each with a capacity of at least 4.5 billion cubic meters, are planned at several German coastal locations – in the form of special ships, so-called Floating Storage and Regasification Units (FSRU). On board, the LNG can be vaporized into gas and finally fed into the gas network. In this way, the floating plants, in contrast to stationary plants, enable the import and further processing of liquefied natural gas at very short notice – and thus a more flexible supply.

All state-rented FSRU should be in operation by winter 2023/2024 at the latest. According to the Federal Ministry of Economics and Climate Protection (BMWK), the capacity will then be at least 25 billion cubic meters of LNG per year. There is also another private project with an annual volume of 4.5 billion cubic meters. For comparison: All existing European LNG terminals only have a regasification capacity of 40 billion cubic meters. A total of one third of the current gas requirement in Germany could be obtained from the new LNG terminals.

A declaration of intent with the German gas importers, which Economics Minister Robert Habeck signed in mid-August, is intended to ensure delivery. According to the agreement, the partner companies Uniper, RWE, EnBW and the EnBW subsidiary VNG are to ensure that the leased LNG ships are provided with gas “at full capacity” by March 2024. According to Habeck, the companies have contracts with around 20 countries. In addition, the Green politician expects new contracts for liquid gas deliveries when Chancellor Olaf Scholz visits the Arabian Peninsula. Scholz is traveling to Saudi Arabia, Qatar and the United Arab Emirates at the weekend.

Two terminals in Wilhelmshaven

The first floating liquid gas terminal is to be the “Höegh Esperanza” in Wilhelmshaven. According to the plans of the politicians, LNG is to be imported via the FSRU ship, which has been under construction since July 4, from the end of the current year. “Up to 7.5 billion cubic meters of natural gas per year are to be handled via this terminal as quickly as possible,” says the operator Uniper. That would correspond to around 8.5 percent of current German gas requirements.

What are LNG terminals used for?

The terminals are the logistical hubs for the LNG infrastructure. First, the large LNG tankers, which transport the liquefied natural gas in spherical tanks, are unloaded at these special facilities. The LNG is stored in double-walled, fully insulated vacuum vessels before being converted again. The liquefied natural gas is heated and compressed. The gas is then fed into high-pressure networks at the terminal, through which conventional natural gas flows.

In addition to the terminal, construction of a 26-kilometer pipeline to connect the ship to the long-distance gas network began at the beginning of August. The new underground line connects the landing stage in the port with the next connection in Etzel, East Frisia. Initially, an annual capacity of up to ten billion cubic meters should be possible, in the medium term with further expansion of the gas network in the hinterland, according to the gas network operator Open Grid Europe (OGE), even up to 28 billion. So the pipeline could also transport gas from other FSRUs.

And indeed, at the beginning of the month, the BMWK announced that it would rent a second terminal in Wilhelmshaven. The ship will have a capacity of up to five billion cubic meters of gas and will go into operation at the end of 2023. It should also be able to process green hydrogen. It is to be operated by the owner, the company Excelerate, together with a consortium of Tree Energy Solutions, Eon Green Gas and Engie.

A terminal in Brunsbüttel

The start of the terminal operated by RWE in Brunsbüttel, like the “Höegh Esperanza”, is already planned for the turn of the year 2022/2023. “Everyone involved is working hard to ensure that this succeeds,” said the Energy Minister of Schleswig-Holstein, Tobias Goldschmidt (Greens). The ship, also built by the Höegh shipping company, is to take in five billion cubic meters of gas per year and will be replaced by an onshore terminal in 2026. Then the capacity should increase to ten billion cubic meters.

A new three-kilometer gas pipeline is also being built in Brunsbüttel for LNG supply. In the meantime, the approval of the planning approval authority has been granted, the Ministry of Energy Transition announced yesterday. The line is to connect the floating terminal in the Elbe port with the Schleswig-Holstein gas distribution network.

Two terminals in Lubmin

But there are not only state-initiated projects: The company Deutsche ReGas gave the go-ahead today for work on the construction of the private LNG terminal “Deutsche Ostsee” in Lubmin in western Pomerania. According to the medium-sized company, the construction activities served to upgrade the industrial port, which had previously only been used by smaller ships, and to create a secure berth.

According to the ambitious plans of Deutsche ReGas, the first gas delivery should arrive via the privately financed terminal as early as December – with smaller shuttle ships from the large tankers anchored off Lubmin to the port and from there to the existing gas network. Because the Baltic Sea pipelines Nord Stream 1 and Nord Stream 2 flow into Lubmin, through which no Russian gas is currently being delivered.

The German energy company RWE and the Norwegian company Stena-Power also want to build a floating gas terminal in Lubmin. According to the BMWK, the system chartered by the federal government 30 to 40 kilometers off the coast will not be available until the end of 2023 at the earliest. A pipeline that has yet to be built will take the gas to Lubmin, from where it will be distributed through other pipelines.

A terminal in Stade

The sixth terminal is to be built in Stade near Hamburg in Lower Saxony and will be ready for use at the end of next year. The FSRU is built by the state-owned company NPorts. The operator is Hanseatic Energy Hub GmbH.

A week ago, the state cabinet decided that the state of Lower Saxony would provide 100 million to finance the terminal. “With the money from the federal government and the now firmly agreed state share, a very significant part of the upcoming project costs can be financed,” said Lower Saxony’s Environment and Energy Minister Olaf Lies (SPD) in the course of the decision.

Lack of funding, no operator, legal problems and trouble with the port industry: In neighboring Hamburg, on the other hand, an LNG terminal may be on the verge of collapse. According to the Senator for the Environment and Energy, Jens Kerstan (Greens), he has agreed with the Federal Minister for Economic Affairs Habeck to wait for another report on how the liquid gas terminal is compatible with the rest of the port. For the Hamburg opposition, the project in Moorburg is already considered a failure.