January 12, 2023

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Green Groups Challenge Germany’s LNG Push

Environmental campaigners have lodged a complaint with German authorities over plans they say would lock in long-term LNG infrastructure that is out of sync with Germany’s climate commitments.

Non-profit group Deutsche Umwelthilfe (DUH) has lodged an objection with Lower Saxony state authorities over the operating license and water law permit for the recently commissioned floating regasification unit at Wilhelmshaven.

DUH wants to limit the lifespan of the license for the Hoegh Esperanza floating storage and regasification unit (FSRU) to a maximum of 10 years ending in 2032. The license currently runs until 2042.

The group also wants to stop the use of harmful biocides in the maintenance process for the LNG terminal’s pipeline system and replace them with an alternative cleaning system.

“For us it is clear: the operating license for the floating LNG terminal ship Hoegh Esperanza in Wilhelmshaven is a threat to biodiversity and also contradicts the Paris climate agreement with fossil gas until 2043,” the group said.

The challenge underscores the rising tensions shaping up between medium-term energy security and long-term climate considerations in the wake of the Russia-Ukraine conflict and related energy crisis.

Germany — and Europe more broadly — is turning to LNG imports to wean itself off Russian piped gas. But the additional import infrastructure required to make the switch has climate stakeholders alarmed that fossil fuels will become further entrenched in Europe's energy mix, compromising the region's wider emissions reduction targets.

In addition to Uniper's Wilhelmshaven project, Deutsche ReGas will officially start up an LNG terminal at the Baltic Sea port of Lubmin on Jan. 14, while an FSRU terminal at Brunsbuttel is also expected to come online this month. Germany aims to open another floating terminal at Stade this year.

In all, there are plans for at least eight floating LNG terminals outside of the Hoegh Esperanza and three fixed terminals, DUH reckons.

A planning paper published in December shows that those 11 additional projects will result in combined import capacity of over 120 billion cubic meters of natural gas. “The planned capacities even exceed the total annual gas consumption [for Germany] from the pre-war period of 90 billion cubic meters per year,” it said.

To the Courts

DUH head Sascha Muller-Kraenner told Energy Intelligence that German authorities now have an opportunity to respond to the complaint, but he was not optimistic about the outcome. "It is very likely that we will then go to court,” he said.

Muller-Kraenner said the group has also “filed opinions” with authorities in relation to the permission processes for the terminals at Brunsbuttel and Stade as a “first step.”

Berlin last May enacted legislation to accelerate the approval of LNG terminals in response to Europe's gas supply crisis. The legislation temporarily suspended the need for environmental impact assessments of floating LNG terminals, although such assessments are still required for fixed terminals.

“However, that does not mean that the material aspects of European and national environmental law do not have to be recognized … when it comes to emission standards, water safety standards [and] nature conservation legislation,” Muller-Kraenner argued.

Misaligned Timelines

Muller-Kraenner stressed that the group is not opposed to LNG terminals in principle. Instead, DUH believes Germany needs a comprehensive plan for LNG infrastructure that considers both the country's energy needs and its climate targets.

In DUH’s view, an unlimited permit for operating the terminals is misaligned with Germany's national climate law and the Constitutional Court’s 2021 ruling on the Climate Change Act. “This is a new legal argument and there has not been a court ruling based on that yet. We believe that we have a good legal case,” he said.

“In practice, what that probably means is that we should have two or three LNG terminals, but not 12," Muller-Kraenner said. "We accept that there is a certain need for LNG capacity for the next 10 years, but not for the next 20 years.”
Deb Kelly, London

UK’s Grain Terminal Receives Record Shipments

National Grid’s Grain LNG terminal in the UK imported a record 91 LNG cargoes last year, helping secure gas supply for the country and fill Europe’s gas storage sites in the wake of Russia's throttling of pipeline gas flows.

The Grain terminal located in Kent, south-east England, smashed the previous record year in 2011 when 66 cargoes unloaded at the facility. The 91 shipments marked a 60% increase on 2021, with the terminal receiving a record 37 cargoes in the fourth quarter, National Grid confirmed on Thursday.

Grain, Europe's largest terminal in terms of storage capacity, sent out over 82 terawatt hours (approximately 8.4 billion cubic meters) of gas into the UK grid in 2022, up from 59 terawatt hours in 2021.

The record shipments helped secure supply for the UK market, particularly during the cold snap in December when the terminal operated at over 90% of its capacity and delivered 600 gigawatt hours of gas into the grid during the month. Typically the terminal’s send out in December is between 200 and 400 gigawatt hours.

Filling European storage

The terminal also played a vital role in filling Europe’s gas inventories ahead of winter. The UK, holding 20% of Europe’s regasification capacity, was a vital gas bridge to Continental Europe last year after Russia cut pipeline flows, delivering regasified LNG through interconnectors with Belgium and the Netherlands.

The UK was responsible for filling approximately 16% of Europe’s gas storage reserves this winter, according to National Grid. The EU’s storage capacity stands at approximately 1119 terawatt hours (around 115 Bcm), and Brussels set a target to have inventories 90% full by 1 November.

National Grid joins a growing list of European LNG players reporting record imports in 2022, driven by lower Russian gas flows. Europe’s thirst for LNG is expected to increase this year as Russian pipeline flows are widely expected to fall further compared to 2022 levels.

Russian pipeline flows to Europe, excluding Turkey, averaged 66 million cubic meters per day over the first two weeks of January, down from around 75 million cubic meters per day in the final week of December, Bruegel data shows.

US LNG replaces Russian volumes

National Grid noted that approximately a third of the shipments into Grain last year were from the US, helping replacing Russian LNG imports.

The UK’s ban on Russian LNG imports officially started on Jan. 1, however the UK last imported a cargo from Russia in March 2022.

Prior to the war in Ukraine, the UK received around 30% of its LNG from Russia, according to National Grid.

Created with Highcharts 9.0.0(million tons)UK LNG IMPORTSEgyptNorwayTrinidad and TobagoRussian FederationNigeriaAlgeriaOthersPeruQatarUnited States2018201920202021202205101520Source: Kpler

Eric Thorp, London

Germany to Receive Third FSRU Next Week

Germany’s third floating storage regasification unit (FSRU) is set to arrive at the port of Brunsbuttel by the end of next week, and will receive its first LNG cargo by the end of January, an RWE spokesperson confirmed with Energy Intelligence.

The Hoegh Gannet FSRU is currently at the Mugardos LNG terminal in Spain, where it is being cooled down to operating temperature and loaded with 40,000 cubic meters of LNG.

The FSRU will depart from Mugardos in the next day or two and then make a stopover in Rotterdam — for import and customs formalities — before arriving at Brunsbuttel at the end of next week, the RWE spokesperson said.

RWE’s project, located at the mouth of the Elbe River in northwestern Germany, is expected to receive its first LNG cargo at the end of January. The cargo will be delivered from the United Arab Emirates onboard the Ish LNG carrier, Kpler data shows.

“The LNG shipment from Adnoc (Abu Dhabi National Oil Company) has a volume of 137,000 cubic meters of LNG and will be the first LNG to be made available to the German gas market via the import terminal in Brunsbüttel,” the RWE spokesperson said.

RWE signed a supply agreement with Adnoc in September last year for the maiden cargo for its Brunsbuttel terminal. The cargo was originally expected to arrive in late December.

The Brunsbuttel project will be the third LNG terminal to come online in Germany. Uniper is expecting its Wilhelmshaven LNG terminal to start commercial operations by mid-January, while privately financed operator Deutsche ReGas will officially open its Lubmin terminal on Jan. 14. The three terminals have a combined regasification capacity of 14.5 billion cubic meters per year.

Germany's LNG imports effort has drawn opposition from environmental campaigners this week.

For more coverage of the Ukraine crisis, visit Ukraine Crisis: Energy Impact >
Eric Thorp, London


In Brief

Ukraine Gets Access to Gas From Southern Europe

Ukraine now has access to non-Russian gas supplies via the backhaul service, or virtual reverse, made possible by amendments made in neighboring Moldova, the Ukrainian gas transmission system operator said on Thursday.

The approved amendments create new opportunities for natural gas imports to Moldova and Ukraine, including via the Trans-Balkan pipeline, Moldovan Deputy Prime Minister Andrei Spinu wrote in Telegram.

This opens the possibility of transporting gas of non-Russian origin — from LNG terminals in Greece and Turkey or Azerbaijani gas — through Trans-Balkan for Ukrainian customers, the Ukrainian gas transmission system operator said. Previously, this mechanism was used mainly by customers from Moldova, it added.

“This step offers an opportunity for our international partners to store gas delivered from terminals in Greece or Turkey in Ukrainian underground storage facilities,” the operator said.

The Trans-Balkan pipeline runs across Ukraine, Moldova, Romania and Bulgaria to Turkey. Russia’s Gazprom used to supply gas to Turkey via Trans-Balkan before launching a direct Turk Stream offshore pipeline to Turkey in 2020.

Ukraine now buys gas from Western traders, including via virtual reverse on westward pipes which transit Russian gas. Ukraine hasn’t imported gas from Russia since 2015 due to a standoff following the 2014 annexation of Crimea.
Staff Reports


Data Snapshot

LNG Netbacks at Key Receiving Terminals

LNG Exporter Netbacks Between Key Receiving Ports
($/MMBtu)AlgeriaAustralia WestAustralia EastMalaysiaNigeriaNorwayOmanPeruQatarRussiaTrinidadUS GulfUS East Coast
Dahej, India19.3519.7919.3819.7818.9718.8220.2618.4320.1719.4318.6618.3718.73
Sodegaura, Japan19.9921.3921.4121.5019.9216.3521.0018.7920.8721.8519.1718.2620.11
Zeebrugge, Belgium16.3614.7314.3314.8115.8516.2015.4914.3015.3614.3515.9815.0416.07
Huelva, Spain19.9918.3717.9718.4519.4519.2419.1217.8518.9917.9819.5118.4819.52
Isle of Grain, UK18.8517.1916.7817.2618.3618.6918.0816.7617.8316.8018.4617.5018.55
Everett, US2.340.771.120.852.031.880.011.601.380.412.55----
Created with Highcharts 9.0.0($/MMBtu)QATAR TO NORTHEAST ASIANetbackNetback8. Aug22. Aug5. Sep19. Sep3. Oct17. Oct31. Oct14. Nov28. Nov12. Dec26. Dec9. Jan10203040506070Energy Intelligence

LNG Market Indicators

Spot LNG Pricing
Latest WGIDailyDaily Chg.Chg. From Latest WGI
NE Asia22.0022.590.200.59
SW Europe20.3020.640.850.34
Futures Pricing
($/MMBtu)Chg.LatestPreviousWeek Ago
Henry Hub, US (futures)0.023.703.673.72
NBP, UK (futures)+0.8220.3419.5122.19
European Spot Pricing
Chg.LatestPreviousWeek Ago
Dutch TTF0.5720.5119.9321.30
Zeebrugge (Belgium)------13.92
German NCG0.1517.7217.5717.35
NBP (UK)0.8519.6818.8317.13
US Markets
US Spot Prices
Sabine Pass, Louisiana0.133.523.393.77
Corpus Christi, Texas0.453.402.95--
Cove Point, Maryland0.403.182.783.00
Elba Island, Georgia--3.52----
Nymex Henry Hub Futures
Near Month0.023.703.673.72
Second Mth0.013.363.353.43
Third Mth0.013.313.293.36
Created with Highcharts 9.0.0($/MMBtu)GLOBAL GAS PRICINGUS NymexDutch TTFNE AsiaFeb '22Mar '22Apr '22May '22Jun '22Jul '22Aug '22Sep '22Oct '22Nov '22Dec '22Jan '230255075100125Energy Intelligence