Germany opens floating gas terminal in North Sea port

Germany has opened its floating liquefied natural gas terminal in the North Sea port of Wilhelmshaven, marking a crucial milestone in its quest for energy independence from Russia.

Olaf Scholz, chancellor, inaugurated the Høegh Esperanza floating storage and regasification unit (FSRU), one of five the German government has contracted to fill the energy vacuum that formed after 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 Esperanza, a specialized ship nearly three football fields long, carries 170 million cubic meters of LNG, much of it from the US, enough to power 50,000 homes for a year. In the coming weeks, it will be converted to gas and fed into the German land gas pipeline network.

Moscow’s decision to slash gas exports to Germany over the summer plunged Europe’s largest economy into its worst energy crisis since World War Two. Before the invasion of Ukraine, Russia accounted for more than half of Germany’s gas imports.

Berlin’s efforts to find a replacement were hampered by its complete lack of LNG import infrastructure and its near-total reliance on pipelines like Nord Stream 1 that brought gas directly from Russia. Since the start of the year, the Scholz government has gone to great lengths, and spent billions of taxpayer euros, to rectify that.

It contracted for five FSRUs, each with a capacity of 5 billion cubic meters of gas per year. He also pushed for 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 shutting off the gas supply,” Scholz said. “He was wrong.”

The chancellor added that Germany will soon have an LNG import capacity of 30 bcm/y on its northern shores. “That’s equivalent to more than half the total volume of pipeline gas that flowed into Germany from Russia last year,” she said.

The infrastructure for the Wilhelmshaven FSRU was built in 10 months, a record for a country where large power projects tend to take years to complete.

“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 succeed,” Scholz said. “And the opposite is true.”

“That is now the new pace with which Germany is pushing infrastructure projects forward, and it should be a model, not only for this facility, but for many others as well,” he said.

The Esperanza will be complemented by a second FSRU, the Høegh Gannet, which will come online at the nearby port of Brunsbüttel in January. A third private FSRU, the Neptune, will launch in Lubmin on the Baltic Sea coast later this month.

“This is a milestone for Germany to become energy independent,” Erik Nyheim, chief executive of Höegh LNG, which owns Esperanza, Gannet and Neptune, told the Financial Times.

Nyheim said Höegh Esperanza, Gannet and Neptune would have a combined regasification capacity of 17.5 billion cubic meters a year, representing “a significant contribution” to Germany’s energy supply. It is about a third of the volume of gas, 50 bcm, that the country imported from Russia last year.

Nyheim said Höegh will have five FSRUs deployed in Europe by next year, half of its fleet, as the continent increases its LNG import capacity.

Climate activists have said investments in new LNG infrastructure are pointless as the EU seeks to go carbon neutral by 2050 and cut its emissions by 55 percent by 2030 compared to 1990 levels.

“We are threatened with massive overcapacity and lock-in effects, although gas consumption in Germany has to fall dramatically in the next few years,” said Sascha Müller-Kraenner, director of German Environmental Aid.

Nyheim said that with Russian supplies falling to near zero, there were few alternatives to the new import terminals.

“Last year, Europe imported 150 billion cubic meters of gas from Russia,” he said. “That now has to be replaced by LNG.”

Olaf Lies, economics minister for Lower Saxony, the state in which Wilhelmshaven is located, said concerns about excess capacity were misplaced. “The concern is not this winter,” he said. “We have to look out for the winter of 2023-4, which we will not go into with the very full storage that we have this year.”

“That’s why Germany needs the terminals.”