The Hoegh Esperanza FSRU approaches Wilhelmshaven, Germany on Dec 15.
Germany’s first liquefied natural gas terminal has arrived on the country’s north coast, the first of several specialist tankers Berlin is banking on to ease its energy crisis.
The Hoegh Esperanza, a floating storage and regasification unit, or FSRU, moored in Wilhelmshaven December 15 ahead of a December 17 opening ceremony attended by German Chancellor Olaf Scholz and Economics Minister Robert Habeck. The loaded ship is expected to start unloading its cargo next week and its future task will be to take on LNG from seagoing vessels to pump into the German land grid.
“We are now looking forward to delivering the first regular LNG cargo in early January,” said Peter Abdo, Chief Commercial Officer for LNG and Global Origination at energy utility Uniper SE, which will operate the FSRU. “This is the next step to actively support the federal government and the security of supply for Germany.”
The ship’s arrival during the first major cold snap in north-west Europe this winter underscores the need for new gas supplies after Russia cut supplies in retaliation for the continent’s support for Ukraine. The resulting surge in energy prices has pushed economies to the brink of recession and forced governments to speed up use of the floating terminals.
The federal government has chartered five FSRUs at a price of around 9.7 billion euros, which is well above the original budget for the floating facilities, according to the Ministry of Economic Affairs.
A private terminal in the port of Lubmin and a state-rented facility in Brunsbüttel will be next to open this winter, according to a ministry document seen by Bloomberg News.
According to estimates by the federal government, the five ships will be able to cover around a third of Germany’s current gas requirements. The extra gas will be essential to prevent Germany’s supplies from being quickly depleted in temperatures around freezing, which are already driving demand for heating. Hoegh Esperanza alone can help replace about 11% of Germany’s gas imports from Russia, Uniper said.
The terminals will also help supply other European nations, particularly in the east, which are vulnerable to reduced pipeline gas flows from Russia, according to the ministry’s document. They will also help ease congestion in other European ports that have been swamped by a record wave of LNG imports.
Quick solution
FSRUs are typically permanently moored near shore. An arriving shipper then transfers LNG into the unit, which stores the cargo and converts it into high-pressure gas. The vessels tend to be quicker, cheaper and greener to develop compared to a land-based installation, although their capacity is much smaller.
At the same time, investments in LNG in Germany are still controversial as the country has committed to becoming carbon neutral by 2045. Environmental groups say the rush to end Russia’s gas dependency could leave the country tied to fossil fuels longer than necessary.
The government has leased the Hoegh Esperanza vessel for 10 years, FSRU provider Hoegh LNG Holdings Ltd said. in a statement. Another company ship, the Hoegh Gannet, will be stationed in Brunsbüttel in January, the ministry said.
The FSRUs in Brunsbüttel and Wilhelmshaven will initially be operated by RWE AG and Uniper respectively via a federal service agreement. The long-term operation of the facilities will be coordinated by a new operating company called Deutsche Energy Terminal GmbH.
According to an agreement signed with the government in August, RWE, Uniper, EnBW Energie Baden-Württemberg AG and VNG AG are responsible for the temporary supply of the two terminals.
