Customers Rally to Germany's First LNG Terminal

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Written by Martin Lynch, European News Editor for Industrial Info (Galway, Ireland)--There has been a strong customer response to Germany's first proposed liquefied natural gas (LNG) terminal, which will be built in Brunsbuettel in the north of the country.

The terminal is being constructed by joint venture company German LNG Terminal, formed by Dutch gas infrastructure company Gasunie and tank storage and terminal operating companies Royal Vopak N.V. (Rotterdam, Netherlands) and Oiltanking GmbH (Hamburg, Germany), which launched an 'open season' to gauge interest for the project in January.

The developer stated that the open season has "resulted in a positive outcome: a considerable number of memorandums of understanding (MoUs) have been signed with companies that represent a comprehensive range and complementary interests, ranging from regasification to send out and LNG distribution services."

The proposed LNG terminal will cost roughly 450 million euro ($536 million) to construct with a provisional commissioning date of 2022. It will be capable of handling approximately 5 billion cubic metres (bcm) of natural gas per year and have a storage capacity of 220,000 cubic metres (cbm). Engineering and other permits will be sought by the end of the year. The developer said further customer discussions are ongoing with "with a view to sign Head of Agreements."

The terminal will not only supply energy to the local energy-intensive industries, particularly those at the nearby port and city of Hamburg, but it will also have the capacity to supply approximately 10% of the German gas market. Germany's government is determined to back its fledgling LNG industry as it seeks to secure and diversify German gas supplies away from a heavy reliance on Russian gas. In March, Germany's new coalition government under Chancellor Angela Merkel set out an energy policy including LNG support for the next four years.

"We are delighted with this outcome," said Katja Freitag, spokesperson of German LNG Terminal. "The open season process has demonstrated that the market has received well the varied range of services to be available at the planned LNG import and small-scale terminal in Brunsbuettel. It confirms that our service portfolio is in line with customers' needs. We are on schedule to make next steps and have started the necessary permit approval process. If all goes to plan, including obtaining the necessary permits by then, we are due to take a final investment decision at the end of 2019. Following this, we will start the construction work with the terminal possibly becoming operational by the end of 2022."

The Brunsbuettel terminal also will support the development of LNG bunkering infrastructure in Germany to boost the use of LNG as an alternative marine fuel, which would cut the shipping sector's emissions.

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