Germany's New Law Speeds Up Two LNG Projects

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Written by Martin Lynch, European News Editor for Industrial Info (Galway, Ireland)--Germany has passed a controversial law to speed up the already rapid rollout of liquefied natural gas (LNG) terminals, in particular two floating storage and regasification units (FSRUs) in Mukran on the Baltic Sea island of Ruegen.

The move comes as the country attempts to fill the void left by Russia cutting gas supplies to much of Europe following its invasion of Ukraine last year. Before the war, the country was reliant on Russia for 55% of its gas imports but that has now been replaced by other sources and a massive drive to create an LNG network.

The coalition German federal government banded together to get the draft law through the lower house of parliament, with 370 votes for and 301 against. It will allow for modifications to the existing LNG Acceleration Act (LNGG) which will see the construction of a new FSRU at Mukran with a capacity of approximately 7 billion cubic meters (Bcm) per year. It also clears the way for the relocation of another located currently at Lubmin, to the same location. Total capacity for both will be 10 Bcm annually. There is strong regional opposition to the projects.

One of the key amendments that the draft law will make is to speed up import terminals for the processing of hydrogen. In line with its green energy transition, the LNG Acceleration Act stipulates that land-based LNG terminals and the natural gas pipelines required for the connection must be suitable for the subsequent conversion to hydrogen. This must happen by 2043 at the latest, in accordance with Germany's goal of climate neutrality by 2045, and the plants can only be operated beyond that date if they are used for climate-neutral hydrogen and its derivatives.

"Russia's war of aggression against Ukraine, which violates international law, has led the German government to reassess the energy and security policy situation in Germany," the government stated. "Current developments show that Russia is no longer a reliable energy supplier...and how important it is to become independent of Russian energy imports."

At the start of this year, two FSRUs backed by the government went into operation in Wilhelmshaven and Brunsbüttel. In addition, a privately-owned FSRU in Lubmin on the Baltic Sea began operations. The three units are capable of handling 13.5 Bcm of gas in 2023. In addition, three further floating LNG terminals backed by the government are under construction: Wilhelmshaven II, Stade and Lubmin.

"There is still a corresponding need to secure the energy supply. In close cooperation with the state government of Mecklenburg-Western Pomerania, the port of Mukran on Rügen is included in the law as a project location on the Baltic Sea coast. The port of Mukran is a designated commercial and industrial area. Construction measures and the anchoring of industrial plants such as floating LNG terminals can be implemented here in a more compatible manner."

The government, while it is pushing through its LNG strategy, is eager to point that "fossil gas will only play a role for a transitional period". It stated that new gas-fired power plants and the pipeline infrastructure will be planned in such a way that they can be gradually converted to CO2-neutral products such as hydrogen. "The construction of the LNG infrastructure is a short-term solution for alternative gas import options. At the same time, the federal government is planning from the outset to be able to use the infrastructure for hydrogen in the future," it concluded.

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