Germany is in a race against time to deploy new LNG import infrastructure as uncertainties over Russian pipeline supplies continue to ramp up.
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There are currently no LNG import terminals in Germany, leaving Berlin more exposed to Russian gas delivery curtailments than other countries in Europe that do have LNG infrastructure such as the Netherlands, France and Poland.
Germany became the first country in Europe to move to the second level of its three-stage emergency gas plan on June 23, highlighting its vulnerability to Russian supply disruption.
Four floating LNG import terminals are planned in Germany along with two permanent onshore sites, with the FSRUs able to be deployed much more quickly than the onshore facilities.
Germany's economy ministry is hopeful it can begin operations at two FSRUs -- one at Wilhelmshaven and one at Brunsbuttel -- before the end of 2022.
The government is fast-tracking FSRU deployment and in May parliament approved a law designed to accelerate the approval process for new LNG import terminals.
And the German regulator in June said it planned to lower the feed-in tariffs at LNG terminals by 40%, significantly improving the competitiveness of direct access into the unified German gas market hub, the THE.
But according to industry group Zukunft Gas, work needs to speed up. "In order to achieve a capacity of 13 Bcm via LNG terminals in the coming year, the pace of constructing and expanding LNG capacities needs to increase." Zukunft Gas chair Timm Kehler said in emailed comments.
"It is now important to further intensify efforts to expand the planned LNG capacities," Kehler said.
The German government acted quickly to charter four FSRUs -- two via Uniper and two via RWE -- but it takes time to prepare the sites to hook up the vessels.
Related story: European LNG rises to 16-week high amid supply warning from Germany's Uniper
"So far we only know of one of these floating LNG terminals, Wilhelmshaven, to have a clear realization perspective," Kehler said.
And having import capacity is only one part of the puzzle -- Germany also needs LNG supply.
The International Energy Agency has warned that Europe's pursuit of LNG to phase out Russian pipeline supply and limited global LNG export capacity additions raised the risk of prolonged tightness in markets.
Germany has held talks with Qatar and Canada on the potential for LNG supply deals, while utilities EnBW and RWE are also eyeing long-term deliveries of US LNG.
Related infographic: Europe on brink of gas crisis as Russia squeezes market
The start of direct LNG supply to Germany can't come fast enough, however, with industry beginning to buckle under the weight of high gas prices and Russia's supply cuts.
Large Russian gas buyer Uniper said June 29 there were "major uncertainties" around the current geopolitical situation as well as the duration and scope of Russian gas supply restrictions.
"Against this background, gas price developments are also difficult to assess at present," it said.
European gas prices have surged since Gazprom cut Nord Stream flows to just 40% of capacity in mid-June, moving closer to the record highs seen in March in the wake of Russia's invasion of Ukraine.
The Dutch TTF front-month contract was last assessed on June 30 at Eur143.40/MWh, up by 73% since the start of June and 330% higher year on year, according to Platts assessments by S&P Global Commodity Insights.
Uniper said it was also examining how the liquidity of the company could be further secured. "Among other things, Uniper entered into discussions with the German government on possible stabilization measures," it said.
These could include a number of instruments such as guarantees and collateral, increasing the current credit facility with state bank KfW that has not yet been drawn, and equity investments.
The German government was already forced to loan Eur10 billion to Gazprom Germania to keep the former Gazprom subsidiary afloat.
Gazprom Germania -- which has been renamed as Securing Energy for Europe (SEFE) -- is a key market player in Germany and Europe with its gas trading subsidiaries including Gazprom Marketing & Trading and storage operator Astora.
The loan is to be used by Gazprom Germania to secure liquidity and purchase replacement gas after Moscow imposed sanctions on the company in May, leading to a halt in Russian gas deliveries.
One positive that has emerged for Germany from the Gazprom Germania nationalization, however, is the transfer of the charter of three LNG vessels to the German state.
Dynagas LNG said on June 27 that the charters of the Amur River, the Ob River and the Clean Energy were now effectively under the control of the German government "for an indefinite period of time."
Gazprom Germania -- the indirect parent of Gazprom Marketing and Trading Singapore -- was placed under the control of the German government on April 4.