Plans for German LNG terminals “massively oversized” – NewClimate Institute

The planned infrastructure for direct imports of liquefied natural gas (LNG) at Germany’s coastlines are “massively oversized” and state involvement means that taxpayer money is used for what could eventually become stranded assets, says a report by think tank NewClimate Institute. The organisation lists plans for eight floating import terminals – so-called Floating Storage Regasification Units (FSRU) – and three fixed onshore facilities with a total capacity to import around 73 billion cubic metres (bcm) of gas per year. That means they could import 50 percent more gas than Germany received from Russia via pipeline before the country started the war against Ukraine, says NewClimate. The organisation says Germany will consume about 83 bcm natural gas in total this year (-21% over 2021 due to savings efforts and mild temperatures), and adds that this amount could be supplied through its neighbours – if import levels remained as high as they have been in recent months. However, the institute said pipeline imports (e.g. from Norway and the Netherlands) are expected to decrease slightly in the coming years, leaving a gap of “at most 15 bcm”, which “could either be filled through ambitious reduction or three floating import terminals.” In addition, Germany has to reduce and eventually largely phase out gas use to reach its target of climate neutrality by 2045. “Achieving the climate targets with the planned terminals in full operation would be almost impossible,” writes NewClimate.

The state has put up financial support for many of the LNG import facilities and leased several of the floating units. The war against Ukraine has put efforts to diversify Germany’s gas supply away from Russian deliveries at the top of the agenda, with domestic LNG infrastructure a crucial part of the strategy. The country has a well-developed natural gas pipeline grid and is connected to terminals in neighbouring countries, but does not currently have its own port to receive LNG directly. The first floating import terminals are set to go online this month or in early 2023.