Ministry paper says Germany could be headed for LNG import overcapacity

Germany’s economy ministry expects a significant import overcapacity if all planned floating and fixed onshore liquefied natural gas (LNG) terminals are implemented as planned, reports Table.Media. The “capacity of the available FSRUs (Floating Storage and Regasification Units) as well as the land-based terminals would exceed the level of the 2021 gas import volumes from Russia,” said an internal note seen by Table.Media. The FSRUs alone would provide between 53 and 67 billion cubic metres by 2024, while up to three fixed onshore terminals – which over time would replace the floating units – could add a further 53 bcm by 2026. However, in 2021, only 54 bcm of fossil gas were imported to Germany via pipeline from Russia, the article said. At the same time, the overcapacities could be exacerbated by the fact that other EU countries also plan to import significantly more LNG (and plan additional import infrastructure), while demand in Germany is expected to fall significantly by 2030. In the internal note, the ministry writes that consumption before the energy crisis – about 90 bcm per year – would decrease to a maximum of 70 bcm by 2030 and 20 bcm by 2040.

Many of the LNG infrastructure projects are funded with government support, adding up to billions of euros. However, the economy ministry told Table.Media that for some projects the chances of realisation are still uncertain.

Researchers and NGOs have long criticised German LNG infrastructure plans as “massively oversized,” but the economy ministry has so far not provided figures for their plans, Table-Media writes. The war against Ukraine has put efforts to diversify Germany’s gas supply away from Russian deliveries at the top of the agenda, with domestic LNG infrastructure a crucial part of the strategy. The country has a well-developed natural gas pipeline grid and is connected to terminals in neighbouring countries, but has so far not had its own port to receive LNG directly. The first floating LNG terminal in Wilhelmshaven is set to be inaugurated by chancellor Olaf Scholz on 17 December, only about six months after the start of construction.