Desperate to reduce its reliance on Russian gas, Germany’s speedy construction of infrastructure and leasing of floating LNG terminals may cost much more than initially assumed.
The German government rented five floating terminals to import liquefied natural gas (LNG), so-called Floating Storage and Regasification Units (FSRU), much to the satisfaction of Vice-Chancellor Robert Habeck, who lauded their contribution to German energy security.
Meanwhile, Spiegel reported that the whole exercise is currently budgeted at €6.56 billion, up from €3 billion in the 2022 budget, a figure confirmed by the ministry to Reuters.
In “extensive consultations with numerous stakeholders”, “further costs have now been determined, and initially, forecast costs have been concretised”, the ministry is quoted as saying. This may concern operating costs and additional infrastructure measures on land.
Two government-run terminals are set to operate in late December or early January, while a private enterprise is set to inaugurate its floating LNG terminal around the same time. Another three FSRUs will come online the year after.to increase the amount of LNG, the country can
By conservative estimates, the three floating LNG terminals would enable Germany to import 15 billion cubic metres of gas annually, equalling about one-third to increase the amount of LNG the country’s 2021 imports from Russia.
“In the short term, gas supply must be secured, but we must be careful not to create fossil overcapacity for the future in the process,” warned Sven Kindler, a green member of parliament in the budgetary committee.
“We need more clarity in the budget committee about the costs and risks of LNG projects,” he told Spiegel.
More LNG infrastructure
About 60 FSRUs exist worldwide, many of them on long-term deployment. When Berlin put out its feelers, interest in providing floating LNG terminals was high – despite their relative scarcity, senior government officials told EURACTIV in April.
Two of the FSRUs had a contract length of 15 instead of 10 years, as initially envisioned, with an option to reduce the contract length to 10 next year.
Meanwhile, Germany is constructing onshore LNG terminals as well. These come with a significantly higher price tag in exchange for lower operating costs – a cost estimate has not yet been made public.
