Page 10 - GLNG Week 25

GLNG COMMENTARY GLNG

addition, Belgium’s Fluxys and Russia’s Novatek use of coal-fired power completely by 2038, but
are working to build a 400mn cubic metre per faces mounting pressure from environmental
year transhipment and bunkering plant. groups to bring the deadline forward. Cheap gas
supplies will provide it with a greater economic
How much is too much? incentive for doing so. It has vowed to turn off all
While German gas needs will very likely grow its nuclear power plants (NPPs) much sooner, by
over the next decade, there are still concerns the end of 2022, providing another boost to gas
about the true benefits of new LNG facilities, demand. These factors strengthen the case for
which is why the projects have generally strug- adding LNG capacity.
gled to move forward.
Germany already has significant spare import Hydrogen future
capacity at pipelines and this is anticipated to In the longer term, the government wants to see
grow after the launch next year of Russia’s 55 hydrogen gradually supersede natural gas. It is
bcm per year Nord Stream 2 pipeline. It also has hoped that infrastructure built for gas transport
access to LNG imports arriving in many neigh- can be steadily repurposed for flowing hydrogen.
bouring countries such as the Netherlands, In their statement, RWE and GLT said they had
Belgium and France. Some of the terminals in also agreed to jointly explore opportunities for
these countries have traditionally struggled with developing the fuel. There are still
underutilisation, with experts arguing that the Germany’s gas industry has called for there to
market is already too crowded to support addi- be greater focus on deriving hydrogen from gas. concerns about
tional capacity in Germany. This includes so-called blue hydrogen, where the true benefits
This said, these terminals and others across hydrogen is split from gas using steam-methane
Europe have seen much higher rates of utilisa- reforming, with the resulting CO2 emissions of new LNG
tion over the past year, as low prices have encour- being re-used or stored underground or off-
aged customers to switch from piped gas to shore. Another option is turquoise hydrogen, facilities.
LNG. These low prices have also boosted overall where hydrogen is extracted from gas using
demand for gas in Europe, by encouraging coun- pyrolysis and solid carbon is produced as a use-
tries to shut down costlier coal-fired capacity ful by-product.
and ramp up gas-fired power generation. If Germany commits to producing hydrogen
This has been clearly seen in Germany, which on an industrial scale using these techniques,
recorded a 23.3% year-on-year surge gas imports then this adds to the benefit of developing new
in March, despite warm weather and coronavi- LNG import infrastructure. But for the time
rus (COVID-19) related lockdowns coming into being, the government’s stance is against gas-de-
force. Uniper in late May said it had decided to rived hydrogen. Its new strategy only provides
bring the 561-MW Irsching-4 and Irsching-5 support for green hydrogen, produced from
gas-fired power plants back online this October, water using renewable energy. The number of
one year earlier than anticipated, citing low gas regasification projects that are realised may
prices. depend on whether the government rethinks
The German government aims to end the this strategy.™

P10 www. NEWSBASE .com Week 25 26•June•2020