FRANKFURT, March 3 (Reuters) – Germany said on Friday that new infrastructure for floating liquefied natural gas terminals (LNG) will exceed previously expected costs, forewarning taxpayers that there will be a price to pay for energy security.
The Bundestag lower house of parliament has approved 9.8 billion euros ($10.40 billion) for the 2022-2038 period, but “It is already clear now, that more cost increases will have to be added,” according to a paper issued by the Economy Ministry.
The paper had been drawn up partly with the help of a study undertaken by the Cologne economic research institute, EWI.
Germany, one of the most reliant in Europe on Russian gas, is looking for alternatives since Moscow turned off the taps in the energy crisis in the wake of war in Ukraine.
However, critics of the LNG push say the future of energy should lie in electrification and such terminals could help fossil-fuel incumbents cement their survival. Environmentalists fear the units could pose risks to local wildlife and tourism.
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Berlin initiated the build-up of floating storage and regasification units (FSRUs) at various coastal locations in record time to speed Germany’s bid to get access to new import channels, on top of raising pipeline and LNG gas receipts from neighbouring Europe for the 2022/23 and 2023/24 winters.
The government paper said that in a follow-up to the immediate measures, it was important to solidify and expand the infrastructure to be able to boost Europe’s gas infrastructure overall, to create buffers, flexibility and solidarity.
“As much as other European countries made LNG shipments to Germany possible, Germany must be able to support its neighbours as well,” it said.
Six FSRUs at four sites are due to be online by the end of 2023.
In 2024 and 2025, five government-chartered FSRUs will offer regasification capacities of 27 billion cubic metres (bcm). A private project at the Lubmin port will offer 5 bcm, but can be doubled to 10 bcm from 2024.
Project companies, utility RWE (RWEG.DE) and HEH, plan land-based LNG hubs at Brunsbuettel and Stade, that could be handling non-fossil fuels such as clean hydrogen or ammonia in the long-term future.
Uniper (UN01.DE) is part of a plan to build a purely green gases hub at Wilhelmshaven.
Final investment decisions on these three projects have not been taken.
($1 = 0.9422 euros)
Reporting by Vera Eckert, editing by Matthias Williams and Sharon Singleton
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