The timely startup of operations at three new German LNG import terminals will be key to boosting the country's gas supply security this winter as Berlin looks ahead to a permanent future without Russian gas.
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Preparations are on track for three floating storage and regasification units to be ready to begin operations by the turn of the year and their prompt commissioning is expected to provide additional homes for any winter wave of LNG deliveries into Europe.
The Netherlands proved earlier this year it was possible to approve and develop new LNG import infrastructure in record time.
Terminal operator Gasunie started commercial operations at the 8 Bcm/year Eemshaven facility in September having begun preparations for the project only in March following Russia's invasion of Ukraine.
Germany hopes now to be able to quickly follow suit after the government made it possible to fast-track new LNG import infrastructure developments.
S&P Global Commodity Insights analyst Joe Matthews said S&P Global had initially began with conservative expectations for the startup of the German terminals.
"But the chartering of FSRUs, efforts to reduce regulatory red tape, inclusion of companies with LNG experience, and success at Eemshaven now point towards initial cargo deliveries in December and early January start to operations for German terminals," Matthews said.
In all, six FSRU projects are underway in Germany -- five backed by the German government alongside one privately-backed facility.
Three terminals -- at Wilhelmshaven, Brunsbuttel, and Lubmin -- are scheduled to be ready to begin operations by the end of the year, with the others expected online by end-2023.
Ultimately, the first three FSRUs will give Germany almost 20 Bcm/year of new LNG import capacity -- equivalent to around 43% of Russian imports in 2021 of around 46 Bcm.
However, initially the terminals will operate at a lower capacity as they ramp up.
According to S&P Global analysts, Germany is expected to import around 9-11 Bcm over calendar year 2023, with the range stemming from how much might go into Germany versus other northwest European terminals.
Germany has repeatedly said it is relying on the timely startup of LNG imports, flagging the launch of commercial operations by the start of 2023 as one of three main elements for ensuring gas supply security this winter.
The other two are: continued efforts to reduce gas consumption by at least 20% in order to save gas; and maintaining a moderate balance between gas imports and re-exports through the peak demand season.
Gas consumption in Germany has already been running well below average since the summer, as high prices and continued advocacy for gas savings triggered more modest gas use.
Platts, part of S&P Global Commodity Insights, assessed the benchmark Dutch TTF month-ahead price at a record Eur319.98/MWh on Aug. 26.
Prices have weakened since then on healthy gas storage levels and demand curtailments, with Platts assessing the TTF month-ahead price on Nov. 16 at Eur109.50/MWh.
As things stand, the three terminals should be ready by the turn of the year. "Right now, everything is running according to plan," according to a spokesperson for Uniper, which is developing the Wilhelmshaven FSRU.
Construction work on the new LNG jetty at Wilhelmshaven was completed in mid-November, with the FSRU Hoegh Esperanza to be deployed at the site by year-end, the economy ministry of Lower Saxony said on Nov. 15.
RWE, meanwhile, is developing the FSRU site at Brunsbuttel -- also known as Elbehafen LNG -- with the as yet undisclosed Hoegh vessel set to arrive in mid-December.
The facility will have an initial capacity of 3.5 Bcm/year, ramping up to 7.5 Bcm/year in 2024.
"According to the current planning status, we assume that the first cargoes will arrive in Brunsbuttel in late 2022," an RWE spokesperson said Nov. 16.
RWE in September secured an LNG cargo from the UAE's ADNOC that is set to arrive in Germany in late December, the first LNG that will be delivered to the Brunsbuttel site.
Speaking Nov. 10, RWE CFO Michael Muller said the company's contribution to Germany's LNG infrastructure could be described as "good corporate citizenship" and that RWE was, for the time being, a "boutique player" in the LNG space.
The third imminent FSRU startup is Deutsche ReGas' 4.5 Bcm/year import terminal at the port of Lubmin, the only privately-backed project under development.
Deutsche ReGas -- founded by Stephan Knabe and Ingo Wagner -- has chartered the Deutsche Ostsee FSRU from France's TotalEnergies for deployment at Lubmin.
"The LNG terminal Deutsche Ostsee will be technically ready on Dec. 1, 2022," a company spokesperson said Nov. 17.
However, permits from the German regulator and regional authorities are required for commissioning.
At the end of October, Deutsche ReGas said it had secured binding long-term capacity bookings of 3.6 Bcm/year for the project's first phase.
Any remaining capacity could be marketed on a short-term basis similar to other planned German LNG import projects.
Securing LNG is, of course, critical to the projects' success.
In August, Uniper, RWE and EnBW subsidiary VNG signed a memorandum of understanding with the German economy ministry on the supply of LNG into the state-backed terminals at Wilhelmshaven and Brunsbuttel to guarantee their full use.
The three companies are to be responsible for LNG supplies to the two FSRUs until March 2024.
The German antitrust office said in October that the LNG would be supplied by the three companies on the basis of fixed supply quotas.
Uniper has already been looking to optimize its existing LNG trading portfolio to enable supplies to Germany.
Uniper CFO Tiina Tuomela, speaking on a third-quarter earnings call Nov. 3, said reshaping the company's gas midstream business and contributing to German supply security were among the management's key near-term objectives.
"Uniper is well positioned with its global LNG business and its contractually secured LNG volumes," it said. In 2021, Uniper traded more than 360 cargoes worldwide.
Uniper also said it was working jointly with Japan's JERA to optimize their respective LNG portfolios. "As a result, Uniper will be able to supply additional LNG to Germany and JERA to Japan," it said.
This month, Uniper also agreed a memorandum of understanding with Israel's NewMed Energy on the potential supply of gas from Israel to Germany via Egypt's LNG export facilities.