The port of Mukran has today become a vivid symbol of Germany’s rapid reorientation from Russian gas to liquefied gas. On November 23, the 280-meter-long Neptune arrived here – the very first of them six floating LNG terminals, which will largely replace Gazprom’s supplies to the German market, which were completely stopped at the end of August. Three of them should enter service this winter, three others (maybe even four) – in the winter of 2023/2024.
Lubmin: liquefied gas instead of Nord Streams
The symbolism lies in the fact that just a year and a half ago, Mukran on the East German island of Rügen was the base port for the Russian ships led by the Akademik Chersky pipe-laying vessel that completed the construction of Nord Stream 2. This gas pipeline has never been used and will certainly not be used by Germany after the Russian attack on Ukraine on February 24, 2022.
However, an even brighter symbol will appear in the coming days. fundamental changes in the German gas market. Then this floating LNG terminal, or the Floating Storage and Regasification Units (FSRU), will go to its jetty in Lubmin after maintenance work in Mukran. Here comes the Russian gas pipelines, now dead weight at the bottom of the Baltic Sea, to the German coast – Nord Stream 2 and its predecessor Nord Stream, destroyed in September by mysterious underwater explosions.
From now on, Lubmin will have to receive LNG from all over the world, here on the FSRU Neptune, leased by the young company Deutsche ReGas from the French energy giant TotalEnergies, it will be gasified again and sent to different regions of Germany via the Opal, Nel – and Eugal pipelines. They were once built to pump Russian gas from two Nord Streams to European consumers.
Private Deutsche ReGas competes with nationalized Uniper
In fact, it was this powerful gas transport infrastructure that gave the small town with its shallow harbor a new life as an LNG terminal. And, apparently, the very first in Germany. And in a year there may be three floating terminals here. It has already been decided that one of the government-leased FSRUs will be sent here, and the same Deutsche ReGas wants to place another one.
Until now, Germany was the only major EU country that did not have facilities on its territory to receive liquefied natural gas. Previously, they did not want to build them, relying on the Gazprom pipeline, which only exacerbated the already high energy dependence on Russia for Europe’s leading economy. But this year, against the background of the war in Ukraine, the situation is changing with great speed.
At the beginning of October, DW already reported extensively in an article “Germany’s First LNG Terminal: Will a Startup Overtake the State?” the story of two medium-sized entrepreneurs from East Germany, who quickly founded the Deutsche ReGas company and set themselves the ambitious goal of starting to receive LPG on December 1 in Lubmin.
Then there was a question mark in the title, now, after the arrival of the Neptune regasification vessel in Mukran, it should have been an exclamation mark. It seems that the East German startup is indeed winning the race against the German government.
It leased a total of five FSRUs during the spring and summer and commissioned, among other things subsequently nationalized the large energy company Uniper to build a first and later a second LNG terminal in the North Sea in the deep-water port of Wilhelmshaven by the end of 2022.
Terminal in Wilhelmshaven is nearing completion
But also for Germany, the first project in Wilhelmshaven is completed in record time. This is largely made possible by a special law, which has greatly simplified and therefore accelerated the issuing of various permits for the construction of specific infrastructure for LNG terminals.
An important milestone was reached on November 15, when the pier in the port of Wilhelmshaven was inaugurated and construction began on May 5. A regasification ship will be berthed here, which is expected to arrive in mid-December. And the first tanker carrying a batch of LNG is scheduled to be delivered on December 20 to supply the country with gas just in time for Christmas.
However, the construction of a pipeline of less than 30 kilometers has yet to be completed, which will connect the berth to the main gas pipeline and nearby major gas storage facilities. But this construction went according to schedule in recent months.
Deutsche ReGas, in turn, has not yet received a final license from the authorities to operate the terminal, so it is still too early to guarantee the start of the terminal on December 1. Technically, this is still possible, assures co-owner and head of the supervisory board of the company Stephan Knabe (Stephan Knabe). “The capacity of our ship is 5.2 billion cubic meters of gas. That is enough to supply two million households with natural gas for a year,” he explains.
LNG terminals will cost the German government twice as much
Deutsche ReGas, which managed to persuade a large Australian investment company to participate in the project, has not yet reported on the financial side of the matter.
For its part, the German government announced on November 21 that its expenditure on the rental of five FSRUs and the construction of onshore infrastructure for LNG terminals has more than doubled: instead of almost 3 billion euros, they will be at least 6.56 billion euros. According to weekly magazine Der Spiegel, this is mainly due to the fact that two regasification vessels had to be rented not for ten, but for fifteen years.
This amount also includes 738 million euros, which the state bank KfW will allocate for the development of an LNG terminal in Brunsbüttel. This is the third German port where another government-leased FSRU should start as early as December 2022 or at least this winter. And money from the budget is needed to turn this temporary, floating terminal into a stationary terminal, with a regasification unit on land.
The money is big, but German Economics Minister Robert Habeck emphasizes that LNG terminals are “the center of our energy supply”. In any case, it is clear that an acute shortage of gas would lead to much higher costs and losses for the German economy.