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Germany warms to liquefied gas terminal plan

October 25, 2018

The German decision to back the construction of a liquefied natural gas terminal comes after the US pressured Europe to buy more of its gas. There is no guarantee a German LNG terminal would exclusively import US gas.

LNG ship
Image: picture-alliance/ANP/L. Van Lieshout

The German government is planning to financially back the construction of the country's first liquefied natural gas (LNG) terminal.

Chancellor Angela Merkel's spokesman Steffen Seibert said Wednesday that "private investors are now studying the construction of a LNG terminal at various potential sites ... and the government is studying options for funding under existing federal programs."

Read more: US sees gas exports to Germany by 2022

The comment came in response to a Wall Street Journal report on Monday that the German government had decided to co-finance the construction of a €500 million ($575 million) LNG terminal in northern Germany.

US President Donald Trump has heavily criticized the European Union, and especially Germany, over their dependence on Russian natural gas.

In July, European Commission President Jean-Claude Junker pledged that the bloc would import significant amounts of LNG from the United States as a concession to cool a potential trade war.

The Trump administration's ire has particularly been directed at Berlin's decision to build the Nord Stream 2 gas pipeline, which will bring Russian gas under the Baltic Sea to Germany.

Read more: Nord Stream 2 gas pipeline – What is the controversy about?

Russia is the main supplier of gas to Germany, followed by the Netherlands and Norway. However, the Netherlands has rapidly shrunk production in recent years and last year for the first time since the 1950s became a net importer of gas. 

LNG - better than diesel?

A LNG terminal would be needed to import American natural gas, which is extracted by "fracking" shale oil.

Germany has no LNG terminal. Spain has seven, the UK six, France four, Italy three and the Netherlands, Greece, Portugal, Belgium, Poland and Lithuania one each.

Merkel's spokesman said any decision to build an LNG terminal would be independent of US pressure and "based on Germany's and Europe's interest in having a diversified, secure, competitive and affordable infrastructure for energy imports."

That means a German LNG terminal could import gas from top LNG exporters such as Qatar, Australia, Malaysia, Nigeria, Indonesia, Algeria and even Russia.

Europe bought about 10 percent of US LNG exports last year, up from 5 percent in 2016. 

cw/rc (AFP, Reuters)

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