Gasunie answers Scholz's call for German LNG capacity
Energy infrastructure operator Gasunie confirmed on February 28 it will construct a 8bn m3/year LNG import terminal in the north German port town of Brunsbuttel, the day after Germany's chancellor Olaf Scholz pledged to expand the country's regasification capacity.
The Brunsbuttel terminal was confirmed as one of the two projects mentioned in Scholz's speech, given days after the German chancellor halted the certification process for Russia's Nord Stream 2 pipeline over Moscow's war in Ukraine. Gasunie is expected to start developing the site later this year, and has said the infrastructure will support green hydrogen imports in addition to LNG. Talks with the German government have entered the final phase, Gasunie said. The company is also looking at plans to expand LNG import capacity in the Netherlands.
The Ukraine crisis has exposed Germany's dependence on Russian gas supplies, forcing Scholz to double down on infrastructure investments. On March 1, a Russian strike hit the centre of Ukraine's second biggest city, Kharkiv. The video of the blast has escalated the stand-off with Western governments, who can be expected to further tighten economic sanctions. The UK's deputy prime minister Dominic Raab suggested Western allies could tighten the boycott on Russia's oil and gas industry.
Gasunie has been looking to build a midsized LNG terminal in northern Germany's Hamburg region since 2017, when it established a joint venture to develop a gasification facility with Dutch gas grid operator Vopak LNG Holding and Oiltanking.
Vopak cancelled its participation in the project last November, when its CEO Eeleco Hoekstra said "commercially" the justification was lacking, according to SP Global. At that time, there were no announcements of binding capacity contracts for LNG from Brunsbuttel. Now, its commercial prospects appear to have radically changed.
Germany receives around half of its gas from Russia and is set to lose alternative baseload electricity supply over this decade as nuclear and coal-fired stations are closed down. The closures are part of the Energiewende clean energy transition policy of Scholz's predecessor, Angela Merkel, but now that relations with Russia have soured, there is more scrutiny of the resilience of future clean energy supply.
In light of the Ukrainian war, Gasunie also said "non-operational" business relations with Gazprom and other Russian IOCs would be frozen. Gasunie's 9% stake in the operational Gazprom-operated Nord Stream 1 pipeline has not been factored into the suspension. Its seat on the Nord Stream shareholding committee, held by Gasunie CEO Han Fennema, has been temporarily relinquished, however, and the company will no longer collaborate on research and scientific development.