Volatile market complicates Germany's LNG import terminal plans

The German government supports plans for a first domestic LNG import terminal, but the volatile global market is complicating existing endeavours, writes Christian Schaudwet in Tagesspiegel Background. The market has long been difficult and increasingly volatile, and there is a lot of uncertainty surrounding future EU natural gas needs, writes Schaudwet. The International Energy Agency (IEA) forecasts that demand for European gas-fired power plants will fall from the end of the decade onwards as renewable capacities grow, despite the scaling back of coal-fired generation. A new analysis by consultancy Team Consult shows that despite a global demand increase in the second half of 2020, the utilisation rate of existing European import terminals sank to only 31 percent in the fourth quarter, writes Schaudwet. Operator Uniper announced in November it would review a planned LNG shipping terminal project at the German North Sea port of Wilhelmshaven due to a lack of market interest, but several other projects are still ongoing.

There are no LNG terminals in Germany yet and plans to set up domestic import infrastructure are contentious for environmental, climate and energy supply reasons. They have also become a hotly debated topic between Germany and the US, which is trying to expand its own liquefied gas exports to Europe. In 2018, German economy minister Peter Altmaier said Germany would speed up the process to build its first LNG import terminal as “a gesture to our American friends,” after U.S. President Donald Trump criticised Germany for its dependence on Russian gas and the construction of the Nord Stream 2 gas pipeline.