Germany sees LNG import capacity of 37 Bcm/year in 2024: ministry

Germany expects the country's LNG import capacity to reach 37 Bcm/year in 2024 and to double again by 2028, the German economy ministry said in response to a parliamentary question published Jan. 13.

Responding to a series of questions from the German political party, die Linke (Left Party), the ministry also said it expected gas supply in 2023 to continue at the same level as last year.

A total of 10 projects for direct LNG imports to Germany are under development, the ministry said, as Berlin looks to offset the impact of lost Russian pipeline gas imports.

The projects include the five FSRU projects initiated by the federal government as well as the onshore LNG terminal in Brunsbuttel in which the state bank KfW holds a 50% stake.

There is one private project at Lubmin -- which will ultimately comprise two FSRUs -- operated by Deutsche ReGas, as well as two private onshore terminals at Stade (Hanseatic Energy Hub) and Wilhelmshaven (TES).

"To ensure gas supply in Germany in winter 2022/2023 and beyond, the government has taken a series of short-term measures, including developing LNG import infrastructure," the ministry said.

"Floating LNG import terminals will be used to close the supply gap," it said.

It said that for the winter 2022/2023, the three new LNG import terminals in Wilhelmshaven, Brunsbuttel and Lubmin would have a combined capacity of 13.5 Bcm/year.

The terminals at Wilhelmshaven and Lubmin have already started operations, with the Brunsbuttel FSRU expected online soon with an initial capacity of 3.5 Bcm/year, rising to 7.5 Bcm/year in 2024-2026.

Once the additional three FSRUs are operational by the end of 2023, capacity in 2024 will reach 37 Bcm/year, and with the startup of three permanent onshore terminals from 2027 capacity will be doubled again.

The ministry added that to receive LNG imports of some 27.5 Bcm/year of gas equivalent, deliveries by an estimated 286 LNG tankers would be necessary.

Gas demand

In 2021, German gas consumption amounted to 96 Bcm, and a demand reduction of 20% would see the total fall by around 19 Bcm, the ministry said.

"For 2023 and 2024 lower gas consumption is expected given the increased gas prices and savings measures," it said. "From the point of view of the federal government, a reduction in gas consumption by 20% is desirable."

The ministry said that as well as the new LNG import infrastructure, Germany would close the gas supply gap through fuel switching in industry, a reduction in gas-fired power generation and mandatory gas savings.

The government has approved two energy-saving decrees for this purpose containing both short- and medium-term measures.

"The measures helped to reduce gas consumption in October and November by 32% and 27%, respectively, compared to 2018-2021," the ministry said.

It added that it assumed that gas supply in Germany could be continued at the same level as last year in 2023.

"Since gas supply in Germany is carried out by energy companies, the government has no direct insight into gas import contracts. But it is in constant exchange with energy companies," it said.

For the two FSRUs chartered by the government in Brunsbuttel and Wilhelmshaven, the ministry said it was "guaranteed" that they will be used at full capacity until April 2024.

After that, the capacity will be offered on the open market.

For the three additional FRSUs set to become operational by the end of 2023, all capacity will also be offered on the market, the ministry said.

For the Brunsbuttel, Wilhelmshaven II and Stade FSRU locations, it is planned that the FSRU operations will be discontinued as soon as the onshore terminals go into operation at the respective sites.

The ministry said that for the partly state-owned onshore terminal at Brunsbuttel, 15-year capacity bookings have already been made with RWE, ConocoPhillips and Ineos.

High prices

In 2021, Germany imported 55 Bcm of gas from Russia and the government said it had been able to offset the lost Russian volumes through demand curtailments and imports from elsewhere in 2022.

In 2021, Germany received -- including transit volumes -- a total of 31.2 Bcm of gas from Norway and 17.9 Bcm from the Netherlands, the ministry said.

For the period January-October 2022, the totals -- still including transit gas -- had already risen to 37.9 Bcm from Norway and 18.9 Bcm from the Netherlands, it said.

"Added to this were significant imports from Belgium and France," it said.

The ministry said a cold winter would see German consumption increase by more than 7 Bcm, while a warm winter would see gas consumption reduced by the same amount.

Germany was hit hard by the loss of Russian imports in the second half of 2022, forcing buyers to find replacement gas at significantly higher cost.

However, the ministry said that according to its own estimates, gas prices would fall in the medium term, although they would "not return to the level of early 2021."

The benchmark TTF month-ahead price traded at under Eur16/MWh at times in early 2021, but surged to record levels last summer.

Platts, part of S&P Global Commodity Insights, assessed the benchmark Dutch TTF month-ahead price at an all-time high of Eur319.98/MWh on Aug. 26.

Prices have weakened since on the back of healthy storage and demand curtailments but remain relatively high with Platts assessing the TTF month-ahead price on Jan. 12 at Eur67.65/MWh.