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German government confirms plan to add LNG infrastructure

Germany's new government plans to add LNG infrastructure with the planned import terminal at Brunsbuttel the most likely project as the cleaner fuel will become key to reducing shipping emissions, the economy and energy ministry said in a statement.

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Germany's new maritime policy coordinator Norbert Brackmann and the state minister for Schleswig-Holstein Daniel Guenther will visit the GATE LNG terminal in Rotterdam Thursday, it said.

GATE project partners Gasunie and Vopak also plan to develop a 5 Bcm/year LNG import facility at Brunsbuttel in the state of Schleswig-Holstein.

According to the ministry's statement, the visit is the first step for the next concrete measures for the realization of the project.



"We want to make Germany a location for LNG infrastructure," the statement said, adding that LNG will play a central role on the way to a'greenshipping'.

Last week, a key committee of the International Maritime Organization (IMO) agreed a strategy to cut the shipping industry's total greenhouse gas emissions by 50% from 2008 levels by 2050.

OPEN SEASON

The German LNG Terminal project partners are currently sounding out market interest in a so-called'open season' until the end of April and plan to take an investment decision on the project in 2019, depending on the results of the open season.

The start of operations would be envisaged by end-2022, when Germany also plans to exit nuclear power generation.

The ministry's statement added that once there is an established business case by the project developers, talks about the realization will start.

Plans to add LNG infrastructure in Germany were a surprise inclusion in the coalition treaty in February.

The Brunsbuttel project is also included in the federal gas grid development plan, which secures a link to the national grid.

Germany is the EU's biggest gas market, but previous plans to build an LNG import terminal fell by the wayside due to uncertainty over future gas demand and the high cost of building a permanent LNG terminal.

The Eur400 million ($500 million) facility would give the country an alternative gas supply to pipeline imports from Russia and Norway.

--Andreas Franke, andreas.franke@spglobal.com