Page 8 - FSUOGM Week 46

FSUOGM COMMENTARY FSUOGM

Germany set for heavier reliance on

Russian gas in coming decades

Russia is already Germany’s biggest supplier and its role is set to expand

GERMANY AS the EU de-facto leader, Germany has over decades. The colossal Groningen gas field in the
the years advocated for energy policies that have Dutch North Sea is due to be shut down in mid-
WHAT: enabled many countries in Europe to reduce 2022, following decades of earthquakes caused
Germany will become their gas imports from Russia, by far the conti- by production activities. Its output for the gas
increasingly dependent nent’s biggest supplier. But Germany itself is set year commencing on October 1 has been capped
on Russian gas as it to grow steadily more dependent on Russian at a mere 9.3 bcm, versus 11.8 bcm in the previ-
phases out coal and state giant Gazprom for its energy needs as it ous 12 months.
nuclear power and its looks to phase out coal and nuclear power and The Netherlands has other, much smaller
alternative supplies alternative supplies dwindle. fields. But low gas prices, draconian rules on
dwindle. nitrogen emissions and the government’s delay
Shrinking alternatives in finalising an incentives package mean the out-
WHY: Russia is already Germany’s largest supplier, look is bleak.
The Netherlands is while Germany is Russia’s biggest customer. Ger- Norway, on the other hand, is set to see supply
closing down its giant man gas demand rose to just above 90bn cubic expand over the 2020s, although there is a risk of
Groningen field in 2022 metres last year, while its Russian imports came decline after 2030.
and Norwegian output to 55.5 bcm, although a portion was transited to
could start falling after other countries. A further 27 bcm came from LNG
2030. Norway and 23.4 bcm from the Netherlands, Germany has a raft of LNG regasification pro-
with the three suppliers accounting for 92% of jects in the works, aimed at diversifying its
WHAT NEXT: Germany’s total imports. import mix. But none of them have reached a
Germany will need new German consumption is forecast to exceed final investment decision (FID).
LNG import capacity to 110 bcm by 2034, Rystad Energy estimates. Gas The most advanced of the schemes is a
diversify its supply, but and renewables are expected to play a much planned 8 bcm per year import terminal in
Nord Stream 2 is also in larger role in the country’s energy mix, as it Brunsbuettel, backed by Dutch gas grid opera-
its interests in terms of proceeds with shutting down its nuclear power tor Gasunie, German tank storage provider Oil-
energy costs and security. plants (NPPs) by 2022, followed by all its coal- tanking and Dutch chemical storage firm Vopak.
fired generation by 2038. The group aim to strike a binding deal with Ger-
Meanwhile, supplies from the Netherlands man power firm RWE for the bulk of its capacity
and Norway are set to shrink over the coming by the end of the year. An FID should be taken

P8 www. NEWSBASE .com Week 46 18•November•2020