Germany should become independent of Russian gas as quickly as possible. The federal government is therefore expanding the capacities for processing liquid gas at lightning speed. Floating terminals should bridge the first few years – but the emergency solution is expensive. And that’s not the only challenge.
With great ambitions in his luggage, Robert Habeck came to Wilhelmshaven in Lower Saxony on July 5th. A “bold exclamation mark” should be set here, as the Minister of Economics of the Greens had put it the day before at a meeting in Hanover. Because here in Wilhelmshaven, Germany wants to lay the foundation for final gas independence from the murderous regime of Russian President Vladimir Putin – and that before the end of this year.
How is this supposed to work? With a technical marvel. The federal government has leased a total of four “floating terminals” for LNG (Liquefied Natural Gas), and the first terminal in Wilhelmshaven is scheduled to go into operation by the end of the year. The floating terminals are special ships where other tankers can dock. The terminals can not only receive and store the liquefied natural gas, but also convert it into its ordinary gaseous state. A connected pipeline then brings the gas into the German grid.
There are exactly 48 of these special ships, known in technical terms as FSRU (Floating storage and regasification unit), all over the world. With the Russian war of aggression in Ukraine, the demand for the floating terminals has skyrocketed: European countries in particular now want to make the pipelines from Russia superfluous. But building a stationary LNG terminal takes years. The floating variant is therefore needed to bridge the gap, so the ships are currently in great demand.
The previous government of Chancellor Angela Merkel (CDU) had given the construction of its own LNG terminals a lower priority. Planned projects in Brunsbüttel (Schleswig-Holstein), for example, failed anyway due to protests from environmentalists and the economy – the pipeline gas from Russia was simply cheaper.
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As one of the few European countries with access to the coast, Germany does not have its own acceptance point for liquid gas. But the war in Ukraine prompted the traffic light government to change course. The federal government has chartered a total of four floating terminals from the specialized shipping companies Höegh LNG (Norway) and Dynagas (Greece). According to the Ministry of Economic Affairs, the four ships provide a volume “of at least five billion cubic meters per year”. That would be 20 billion cubic meters – for comparison: In 2021 Germany had consumed about 46 billion cubic meters of gas from Russia.
So the floating terminals represent a significant step towards energy independence from Russia. But they also have a downside: FSRU units are expensive, very expensive. The exact rental conditions for the individual ships are unknown, but various indications give an idea of an approximate price range. In mid-April, Christian Lindner’s (FDP) Ministry of Finance released three billion euros over ten years for chartering the terminals. That corresponds to an average of 75 million euros per ship and year – or just over 200,000 euros a day.
Experts say that sounds realistic. For comparison: A floating terminal, appropriately named “Independence”, has been stationed in the Lithuanian port of Klapeida since 2014, also owned by Höegh LNG. According to the state-owned oil company Klaipedos Nafta, the charter contract has a duration of ten years and costs a total of 43 million euros per year. But now, eight years later, the market situation is completely different – which should make itself felt in the Federal Republic in the form of a substantial price premium.
Where the four ships are to be moored is still unclear. In addition to Wilhelmshaven, the second floating LNG terminal is to be built in Brunsbüttel, where there have been bitter protests in the past. The terminal should be ready in winter, they say. Stade in Lower Saxony near Hamburg is under discussion as a third location; A stationary terminal is also planned there in the medium term. “I assume that Stade will also become an LNG location,” said Habeck on Thursday.
The fourth location is still completely open. A few weeks ago, the Ministry of Economics brought up a few candidates itself: Rostock, for example, or the Hamburg district of Moorburg, or even the Dutch seaport of Eemshaven near the border. But before gas can actually be loaded at all these locations, further precautions are necessary.
In Wilhelmshaven, for example, a 30-kilometre-long pipeline has yet to be laid, which will take the gas from the terminal to the next connection point to the gas grid near the East Frisian town of Etzel. A 30-kilometer pipeline by the end of the year? “I think that’s unworldly,” says an industry insider. In Brunsbüttel, a 60-kilometer pipeline has to be laid. According to the insider, the corresponding procedures are currently being accelerated. “But I’m still pretty skeptical that it will work.”
And then, of course, you also need gas that can be loaded. But the world market for LNG is manageable and the competition is fierce. Top suppliers like the USA are already exporting at the limit, Russia is of course not a supplier. In addition to Australia, there are also smaller countries like Qatar, which, however, made it clear to Habeck during his state visit in March that capacities can hardly be increased in the short term.
But it will still be a while before the four chartered ships arrive. According to Dynagas, its two leased ships are the “Transgas Power” and the “Transgas Force”. However, satellite data from the shipping portal “Marine Traffic” shows that the “Power” is currently en route from the Japanese metropolis of Sendai to the US port city of Freeport on the Gulf Coast of Texas. The “Force” is again in the Caribbean, with an unclear destination.
The other ship supplier Höegh LNG has so far only made public the identity of one of its two ships that are planned for use in Germany. The “Höegh Esperanza” is currently located on the east coast of Florida. But as soon as possible, the four ships should dock in Germany and deliver valuable liquid gas. And then, said Habeck in Wilhelmshaven, “then we would have made it.”