Title: LNG's Humble Share in Germany's Gas Imports
Germany's LNG infrastructure might boast a hefty price tag, but it seems the billion-euro investment hasn't made much of an impact on Germany's gas import game plan. As revealed by data from the Federal Network Agency, only a slim 7% of the country's gas imports during the past year have been transported via its LNG terminals.
The data shows that between the start of LNG imports at Wilhelmshaven a year ago and the beginning of December 2023, around 65.7 terawatt hours of LNG were imported. That amounts to just over 7% of the total 933.4 terawatt hours of gas imports during the period.
Securing energy independence
Since the German government had predicted LNG import capacities of 13.5 billion cubic meters of gas for this year, they were expecting at least double the amount of LNG to be imported. Kerstin Andreae, Chairwoman of BDEW, acknowledged the unused capacity of the LNG terminals as an essential building block for an independent and secure energy supply in Germany.
Even though Germany currently obtains pipeline gas more affordably, the tense situation on the energy markets highlights the importance of having the LNG terminals available. Andreae believed the government had acted wisely to avoid potential gas shortages as a precaution last winter.
Wilhelmshaven's Leading LNG Terminal
Germany's most prominent LNG terminal can be found in Wilhelmshaven, Lower Saxony. Opening on December 21, 2022, it's since provided 42.6 terawatt hours of gas to the grid, making it the country's leading LNG terminal. Following close behind is Brunsbüttel in Schleswig-Holstein, contributing 12.8 terawatt hours since the end of March, and then a private terminal in Lubmin, Mecklenburg-Western Pomerania, with 6.7 terawatt hours since the end of April.
The state of Lower Saxony and the operator will receive the fourth LNG terminal in Stade on Saturday, with two more floating terminals planned for Wilhelmshaven and Rügen in 2024. Despite these plans, critics warn that expanding the LNG infrastructure risks creating more capacity for fossil fuels than needed to replace previous gas imports from Russia.
A Mixed Bag of Gas Sources
Germany imported roughly 390 terawatt hours of gas this year from Norway, leading the way, followed by the Netherlands with just under 232 terawatt hours, and Belgium with around 197 terawatt hours. Direct gas flow from Russia to Germany ceased due to the Ukraine war, and Germany purchased the majority of its LNG from the United States, accounting for 84% of its LNG share.
The U.S. often extracts its gas using the contentious fracking method, but industry association BDEW cautioned that the origin of each tanker and the composition of the delivered LNG might not always be easily traceable.
Sources:
Enrichment Data (as applicable):
- High operating costs in German LNG terminals can be attributable to several factors. Firstly, variable regasification costs in Germany are 86% higher than in other northwest European facilities, largely due to higher fuel gas losses.
- Gas import demands have declined by around 50% since 2021, resulting in reduced gas consumption. In addition, only around 8% of total gas imports have come from German LNG terminals in 2023, indicating a marginal decline in LNG imports compared to previous years.
- Norwegian pipeline gas remains the primary gas import for Germany, making it a more cost-effective option compared to LNG imports. U.S. LNG is also a significant source of imports but might not always be as competitive, due to high regasification costs in Germany.
- Germany maintains a considerable number of unused regasification slots, contributing to unused capacity. Opposition from environmental groups and the government's focus on renewable energy and reducing fossil fuel dependence might further limit LNG imports.
- European demand for LNG is expected to decrease significantly by 2025, with reductions continuing through 2030. Despite these trends, European countries - including Germany - are planning investments in new LNG import terminals that could result in more than 300 bcm of unused capacity by 2030.
