Germany embraces LNG after halting Nord Stream 2 certification
Germany's government has embraced LNG and may even consider delaying the closure of its remaining nuclear and coal power plants as part of efforts to reduce its reliance on Russian energy.
The U-turn in strategy comes less than a week after German chancellor Olaf Scholz announced that Germany was halting the certification process necessary for Russia's Nord Stream 2 pipeline to begin flowing gas. Germany has been an ardent supporter of Nord Stream 2, which would bring an extra 55bn m3 of Siberian gas annually to the north German coast, repeatedly defending the project as strictly commercial rather than political in nature.
Berlin has reversed its position in light of Russia's full-scale invasion of Ukraine, now in its fifth day. The German government has also agreed to send anti-tank weapons and anti-aircraft defence systems to Ukraine, marking an end to its post-World War 2 policy of never sending lethal military equipment to a conflict zone.
After initial reluctance, Germany has also backed a move by the US and its European allies to restrict some Russian banks from using the SWIFT financial messaging system.
In a speech on February 27, German chancellor Olaf Scholz called on Germany to "change course to overcome our dependence on imports from individual energy suppliers." Germany currently gets around half of its gas and its coal from Russia, along with a third of its oil.
This shift in strategy will involve building two LNG import terminals in Brunsbuettel and Wilhelmshaven, as well as efforts to expand domestic gas supply, which has been in decline for years. This is a boon for German LNG Terminal (GLT), a joint venture between Dutch companies Gasunie and Vopak and Germany's Oiltanking, which is working towards a final investment decision on a 8bn m3/year regasification terminal in Brunsbuettal.
GLT is looking to finalise an offtake deal with German energy group RWE covering "a substantial" part of the terminal's capacity.
Uniper had plans for a 10bn m3/yr LNG terminal in Wilhelmshaven, but said in November 2020 it was considering converting the facility to instead import hydrogen, after failing to attract enough binding booking for its capacity.