Page 10 - FSUOGM Week 13 2022

FSUOGM POLICY FSUOGM

Germany unveils plan to phase

out Russian energy

GERMANY GERMANY is looking to halve its imports of The country is also working on phasing out
Russian oil by the middle of this year and make Russian gas, “but the process is demanding,”
Russian imports its refining sector “almost independent” from according to Habeck. It will take until mid-
account for 35% of Moscow by the end of 2022, the country’s econ- 2024 for Germany to be “largely independent”
the oil that is refined in omy minister Robert Habeck announced on of Russian gas, the minister said, and even this
Germany. March 28. will require a focus on reducing consumption at
Berlin has radically changed its energy policy all levels, and a massive expansion in renewable
in the wake of Russia’s invasion of Ukraine that energy use.
started on February 24. Once fairly comforta- Russian gas was used to cover 55% of German
ble with its significant dependence on Russian consumption last year, according to the report,
energy, it now has plans to phase out energy but this has since fallen to 40%. Since placing
trade with Moscow as soon as it can. the Nord Stream 2 pipeline in seemingly perma-
Russian imports account for 35% of the oil nent hiatus, the government has announced it
that was refined in Germany, according to an will support the development of LNG terminals
energy security report released by the govern- instead. Terminals are planned in Brunsbuettel
ment on March 28. But dependence could be (8bn cubic metres per year), Wilhelmshaven (9.8
reduced to about 25% “in the coming weeks,” if bcm per year) and Stade (12 bcm per year).
expiring contracts are not renewed, the report At Brunsbuettel, Shell on March 23 signed a
said. Alternative supplies can be sourced to cover memorandum of understanding (MoU) on the
the shortfall, the report stated. long-term booking of a “substantial” part of the
Russia’s Rosneft has a 12-month contract to terminal’s capacity. German energy group RWE is
deliver 47,000-83,000 barrels per day of crude to also expected to reserve some capacity. The pro-
France’s TotalEnergies via the Druzhba pipeline ject’s developing consortium is led by Dutch gas
to the 210,000 bpd Leuna refinery, but this is due grid operator Gasunie, which in March signed a
to expire this month. TotalEnergies has already memorandum with German state-owned invest-
said it will end its oil trade with Russia as soon ment bank KfW on financing. Under the deal,
as it can, and “by the end of 2022 at the latest.” KfW will take a 50% stake in the development.
Russian oil imports at Leuna will be halved by Just days after Moscow launched its inva-
mid-April, according to the German govern- sion, Germany’s Uniper said it was looking to
ment’s plan. restart work on the terminal in Wilhelmshaven.
However, the report stressed that phasing out The energy company invited binding bids for
Russian oil would not be an easy undertaking. the planned facility’s capacity in October 2020,
The alternative supply that is found must be of but the following month said it was considering
a similar quality, not just at Leuna but also the building a hydrogen terminal instead, because
226,000 bpd Schwedt refinery, which accounts of “market players’ reluctance to make binding
for a third of Russian oil imports to Germany. booking for import capacity.” That was before
Rosneft has a 54.5% stake in the Schwedt refin- Nord Stream 2 was put on hold, however.
ery and had wanted to acquire Shell’s 37.5% stake. At Stade, developer Hanseatic Energy Hub
However, the German energy ministry announced (HEH) invited expressions of interest (EoIs)
on March 21 it had put the deal under review, likely in capacity bookings at the planned termi-
indicating it will be assessed to see if it is in line with nal on March 21. HEH held the non-binding
Germany’s national interests. phase for capacity interest in February 2021,
The report stated that Germany might be able reporting good results, but repeatedly delayed
to offset a reduction in pipeline oil supplies with holding a binding phase because of market
seabourne deliveries, either via the German port turbulence.
of Rostock or via the Polish port of Gdansk. The “The interest in the future German LNG mar-
German and Polish governments are discussing ket is increasingly strong,” HEH managing part-
this option, although Gdansk this week said that ner Johann Killinger said in a statement. “With
supplying Polish refineries would be its priority. the expression of interest process starting today,
Germany’s government also noted that deliver- we are creating the foundation to quickly carry
ies could be made to German refineries either by out the binding open season process. We have
truck or train. done our homework, and with our strong part-
Germany has also made progress reducing ners we are ready to make our contribution to
Russian coal imports, with Habeck estimating the diversification of German energy imports.”
that dependency on Russian imports would fall Notably, the developers of all three terminals
from 50% to 25% “in the next few weeks.” Under have said the facilities could be repurposed for
the plan, Germany should be “completely inde- hydrogen imports at a later stage, making it pos-
pendent of Russian hard coal” by autumn, the sible for them to play a role in the post-natural
minister said. gas energy mix of Germany. ™

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