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Germany has opened its floating liquefied natural gas terminal in the North Sea port of Wilhelmshaven, marking a key milestone in its quest for energy independence from Russia.
Olaf Scholz, the chancellor, opened the Høegh Esperanza floating storage and regasification unit (FSRU), one of five contracted by the German government to fill the energy gap created by Russia’s invasion of Ukraine in February.
“This is a very important contribution to our security.” . . and a good day for Germany,” Scholz said in Wilhelmshaven.
The Esperanca, a specialized vessel almost three football fields long, carries 170 million cubic meters of LNG, most of which originates in the US — enough to supply 50,000 households with gas for a year. Over the coming weeks, it will be converted back into gas and fed into Germany’s onshore gas pipeline network.
Moscow’s decision to drastically cut gas exports to Germany over the summer plunged Europe’s largest economy into its worst energy crisis since World War II. Before the invasion of Ukraine, Russia accounted for more than half of Germany’s gas imports.
Berlin’s efforts to find a replacement have been hampered by a complete lack of infrastructure to import LNG and an almost total reliance on pipelines such as Nord Stream 1 that brought gas directly from Russia. Since the beginning of the year, the Scholz government has made a huge effort — and spent billions of taxpayers’ euros — to get it right.
It contracted five FSRUs, each with a capacity of 5 billion cubic meters of gas per year. It has also initiated the construction of new permanent LNG import terminals, one of which will be built in Wilhelmshaven.
“Russian President Putin thought he could blackmail us by turning off the gas,” Scholz said. “He made a mistake.”
The chancellor added that Germany will soon have an LNG import capacity of 30 billion cubic meters per year on its northern shores. “This is equivalent to more than half of the entire amount of pipeline gas that arrived in Germany from Russia last year,” he said.
The infrastructure for the Wilhelmshaven FSRU was built in 10 months – a record for a country where major energy projects take years.
“When we said that such a terminal should be built in Wilhelmshaven this year, people said that it would never be possible, that it would never work,” Scholz said. “And the opposite is true.”
“It is now the new pace at which Germany is launching infrastructure projects and it should be a model — not just for this facility, but for many others,” he said.
Esperanza will be joined by another FSRU, the Høegh Gannet, which will enter service in the nearby port of Brunsbüttel in January. The third, private, FSRU – Neptun – will be inaugurated in Lubmin on the Baltic Sea coast later this month.
“This is a turning point for Germany to become energy independent,” Eric Nyheim, CEO of Hoegh LNG, which owns Esperanza, Gannet and Neptune, told the Financial Times.
Nyheim said Hoegh Esperanza, Gannet and Neptune will have a combined regasification capacity of 17.5 billion cubic meters per year, a “significant contribution” to Germany’s energy supply. This is about a third of the amount of gas — 50 billion cubic meters — that the country imported from Russia last year.
Nyheim said Hoegh will have five FSRUs deployed in Europe by next year – half of its fleet – as the continent ramps up its LNG import capacity.
Climate activists say investment in new LNG infrastructure makes no sense when the EU is aiming to become carbon neutral by 2050 and cut its emissions by 55 percent by 2030 compared to 1990 levels.
“We are threatened by huge overcapacity and lock-in effects – even though gas consumption in Germany must fall dramatically in the coming years,” said Sascha Müller-Kreiner, head of Germany’s environmental aid.
Nyheim said that with Russian stocks down to near zero, there wasn’t much of an alternative for new import terminals.
“Last year, Europe imported 150 billion cubic meters of gas from Russia,” he said. “It must now be replaced by LNG.”
Olaf Liss, the economy minister of Lower Saxony, the state where Wilhelmshaven is located, said concerns about overcapacity were misplaced. “Never mind this winter,” he said. “We have to look out for the winter of 2023-4, which we will not go into with the well-stocked storage we have this year.”
“That’s why Germany needs terminals.”
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