Germany earmarks €3 billion for floating LNG terminals

The German government plans to spend as much as as €3 billion ($3.25 billion) on floating liquefied natural gas (LNG) terminals over the next decade, the Finance Ministry confirmed on Thursday. 

News of the plan was first published on the online news site The Pioneer. 

A letter from the Finance Ministry to the parliamentary Budget Committee said the aim of the investment — which was made without the consent of Germany's Bundestag parliament — was to lease four floating LNG terminals to allow for the import of gas in light of recent developments with Germany's current gas supply partner Russia.

Germany under pressure to quickly kick its Russian gas habit

Germany has come under massive pressure to divest itself entirely of Russian gas after Moscow invaded neighboring Ukraine in February.

Two days before Russia launched the February 24 invasion, German Chancellor Olaf Scholz officially withdrew approval for the recently completed €9.5 billion ($10.3 billion) Nord Stream 2 gas pipeline between Russia and Germany.  

Berlin has resisted calls for a total import ban on Russian fossil fuels, irking many allies as Russia's war in Ukraine grinds on — financed by energy sales to Europe and beyond.

Officially, Berlin hopes to be free of Russian energy imports by mid-2024.

First ships could deliver gas by winter

The German energy company RWE, which will be involved in the project, said the first ships could begin delivering gas from other suppliers as early as this winter depending on how quickly infrastructure on land can be prepared.

The government is currently assessing where the terminals could best be installed. Ports such as Wilhelmshaven, Brunsbüttel and Rostock are under consideration.

A Finance Ministry "Progress Report on Energy Security" published in March said the government had already signed options with RWE and Uniper for three floating terminals. The Finance Ministry's letter to the Bundestag calls for a fourth.

What about consuming less energy?

Last week, the Berlin-based think tank German Institute for Economic Research (DIW) said Germany could kick its dependency on Russian energy imports before winter by lowering consumption and making more efficient use of existing infrastructure.

DIW suggested using existing LNG terminals in France, Belgium and the Netherlands, as well as gas pipelines from southern Europe to import fuel from Algeria and Libya.

Brussels-based think tank Bruegel estimates EU countries currently pay Moscow €450 million each day for gas alone. 

Paperwork for the lease and operation of the terminals is scheduled to be signed this Thursday and on April 20.

Edited by: Rebecca Staudenmaier