Desperate to reduce its reliance on Russian gas, which has led to much higher energy prices in the past, Germany is quick to build infrastructure and lease new LNG terminals. Unfortunately, these moves seem to be costing much more than expected.
The German government just rented five floating terminals, or Floating Storage and Regasification Units (FSRUs), to bring liquefied natural gas (LNG) into the country. Vice-Chancellor Robert Habeck is satisfied with their contribution to Germany’s energy security.
Spiegel reported that the budget for the upcoming initiative has now been budgeted at €6.56 billion, compared to a budget of €3 billion in 2022. This figure was confirmed by the ministry via Reuters.
In “extensive consultations with stakeholders”, “further costs have now been determined, and initially, forecast costs have been concretised”. The ministry is quoted as saying the may concern operating costs and additional infrastructure measures on land.
There are two government-run terminals that will come online in late December or early January. There is also a private enterprise that will inaugurate its own floating LNG terminal at the same time. This means that by the year after, there will be three additional FSRUs (Floating Storage and Reclaiming Units) to help provide an increased amount of LNG so that the country has enough gas for power generation.
If these three LNG terminals are enabled, Germany will be able to import about 15 billion cubic meters of gas annually. This equals about one-third of the total amount of gas that Germany imported from Russia last year.
“In the short term, we need to make sure that gas supply is locked down, but we need to be careful not to create an excess of fossil fuels for the future,” said Sven Kindler, a green member of parliament in the budgetary committee.
There are roughly 60 FSRUs units in existence in the world, with many of them in permanent deployment. When Berlin put out the call for FLNG supplies, interest was high – senior government officials told EURACTIV in April.
As originally planned, two of the FSRUs had 15-year contracts instead of 10. They still had the option to reduce the contract length to 10 next year.
Germany is also constructing onshore LNG terminals. These come with a higher initial cost but lower operating expenses when compared to offshore terminals.