Page 4 - GLNG Week 19 2022

GLNG COMMENTARY GLNG

European LNG rundown

MIDDLE EAST IN the wake of Russia’s invasion of Ukraine, a raft floating storage and regasification units (FSRUs)
of new LNG import projects have been proposed for the project, which is due online in two stages
across Europe, while a number of pre-invasion in 2022-23 and 2025. A second, 2.2 bcm per year
projects that once were considered to have a FSRU has been proposed in Wilhelmshaven
questionable economic case are now moving by Tree Energy Solution, with a launch target
forward swiftly. of 2025. Finally, Gasunie wants to launch an 8
Once considered a backwater in terms of bcm per year facility in 2026 in Brunsbuettel,
LNG market growth prospects, Europe is now all sooner if progress is fast. The project secured
embracing the supercooled gas like never before backing from Germany energy group RWE in
in its push to end all use of Russian gas. Indeed, early March, and is set to get funding from Ger-
data published by Gas Infrastructure Europe man development bank KfW.
(GIE) in late April indicates that Europe’s regas-
ification capacity will rise by 102.5bn cubic Other new markets
metres per year to 361.8 bcm per year by 2026. Several LNG projects have been proposed in
It is therefore worth looking at what projects are Ireland in the past, but none have made any real
taking shape across the continent on a case-by- progress because of successive governments’
case basis. antipathy towards importing fracked US gas.
Currently on the table are the 7.8 bcm per year
Germany’s U-turn Shannon LNG and 2.6 bcm per year Mag Mell
The European country that has made the most import projects.
drastic U-turn in its energy policy is undoubt- Natural gas accounts for over a third of Ire-
edly Germany. For years, Germany has been land’s primary energy mix, and three-quarters
comfortable with its significant reliance on Rus- of supply comes from a single pipeline from the
sian gas, which at times is used to cover as much UK. The rest comes from the Corrib field off Ire-
as two thirds of its gas demand. The current land’s west coast, but its production is in decline,
government led by Chancellor Olaf Scholz fol- prompting energy security concerns.
lowed the policy of its predecessor in maintain- Whether or not Ireland’s coalition govern-
ing support for Russia’s Nord Stream 2 right up ment comprising the right-leaning Fianna Fail
until Russian troops moved into the rebel-held and Fine Gael parties and the Green party will
Donbas region of east Ukraine on February 21, change course and back these projects is uncer-
three days before all-out war began. tain, even under current market conditions.
Germany does not currently buy any LNG, However, the government has said it “is consid-
relying instead on mostly gas from the Nether- ering the risks to both natural gas and electricity
lands and Norway, as well as limited domestic supplies, and a range of measures including the
supply, to supplement its Russian imports. But need for additional capacity to import energy
there are now four LNG import projects in play (such as LNG).”
in the country, and while three were pre-war Another new LNG market is set to be Esto-
proposals, in recent months they have made nia, where Axela has proposed the 2.5 bcm per
rapid progress. year Paldiski LNG terminal, and Liwathon the 4
The largest of the planned terminals is in bcm per year Tallinn LNG terminal. Alexela has
Stade, and will have a capacity of 12 bcm per year. said it will start work on the construction of a
It is backed by Hanseatic Energy Hub, whose quay to house the terminal later this month, and
shareholders include Belgium’s Fluzys, Swit- negotiations are underway with Elering on the
zerland’s Partners Group and Hamburg-based development of a pipeline to link the facility up
Buss Group. Planning approval is currently with the national grid.
being sought for the €800mn ($880mn) project. Elering is also working with Gasgrid Finland
A non-binding round for its capacity took place on jointly leasing a FSRU, which will be placed
in February last year and indicated sufficient off Finland’s south coast, or initially in Estonia if
interest. A final investment decision (FID) is the necessary Finnish infrastructure is not ready
officially targeted for next year, but given Ger- in time for launch next winter.
many’s renewed commitment in LNG, the mile- LNG co-operation makes sense for Esto-
stone may be reached sooner. Operations are due nia and Finland, which are both bracing for a
to start in 2026. potential disruption in Russian gas supply after
Uniper, meanwhile, is pursuing a 7.5 bcm refusing to pay for imports in rubles, and want
per year project in Wilhelmshaven, which failed to phase out Russian gas themselves as soon as
to secure sufficient capacity booking interest possible. The two countries are connected by the
in the past, but is now back on the table. Uni- 2.6 bcm per year Balticconnector pipeline, which
per announced on May 5 it had chartered two was commissioned at the start of 2020. The pair

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