Page 13 - GLNG Week 09 2022

GLNG EUROPE GLNG

Russian invasion triggers U-turn

in German energy policy

POLICY GERMANY has generally been quite com- domestic gas supply, which has been falling for
fortable with its significant reliance on Russian years.
energy, despite the political strings attached to Dutch companies Gasunie and Vopak,
this. The country relies on Russia for half of its together with Germany’s Oiltanking, are work-
gas and coal, and just over a third of its oil. And ing towards a final investment decision (FID) on
it has been an ardent supporter of Russia’s Nord a 8bn cubic metre per year regasification termi-
Stream 2 pipeline, even though it would only nal in Brunsbuettel. They signed a preliminary
increase this dependency. offtake agreement with German energy group
That long-standing support ended abruptly RWE in 2018 covering a “substantial” part of
last week, when German Chancellor Olaf the terminal’s capacity, but have had difficulty
Scholz said his government would halt the cer- finalising arrangements. Government support –
tification process necessary for the completed whether regulatory or financial – could take the
Nord Stream 2 to flow gas. That decision was project over the finish line.
taken after Russian President Vladimir Putin The same could be true of a rival plan for a In Nord Stream
recognised Ukraine’s eastern breakaway states 10 bcm per year LNG terminal in Wilhelms-
of Donetsk and Lugansk. A day later, Mos- haven, spearheaded by Uniper. Uniper had been 2’s absence,
cow launched its all-out invasion of the rest of thinking about converting the facility to receive
Ukraine. hydrogen instead, however, after failing to attract the country
While it is not completely beyond the realms enough binding booking for its capacity. But
of possibility that Nord Stream 2 might still assuming Nord Stream 2 falters, the European plans to build
be revived in the event of a faster resolution companies supporting the project – Shell, Win- two LNG import
in Ukraine, it seems extremely unlikely. Ger- tershall Dea, OMV, Engie and Uniper itself –
man policy towards Russia has undergone a could get behind LNG instead. terminals in
sea change. Over the weekend, its government One of those companies, Shell, already
announced it would provide Ukraine with anti- announced on February 28 that it was with- Brunsbuettel and
tank and anti-aircraft equipment, marking the drawing from the project, while also severing ties
first time it has sent lethal weaponry to a con- with Gazprom in the Russian upstream industry. Wilhelmshaven.
flict zone since World War 2. It has also backed OMV said it was holding crisis talks regarding
Western plans to block Russian banks from the the pipeline on the same day.
SWIFT financial messaging system, after some Germany is also putting extra emphasis on
initial reluctance. energy security and less on the energy transition
Scholz has also confirmed a substantial shift in light of events in Ukraine. Scholz said that
in German energy policy. In Nord Stream 2’s Germany would also slow down the phase-out
absence, the country plans to build two LNG of its nuclear and coal plants, which had been
import terminals in Brunsbuettel and Wil- due to be retired over the next decade, to provide
helmshaven, while also taking steps to ramp up necessary baseload capacity.™

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