Brunsbüttel LNG Terminal

From Global Energy Monitor
This article is part of the Global Fossil Infrastructure Tracker, a project of Global Energy Monitor.
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Brunsbüttel LNG Terminal, also called Hamburg LNG Terminal or German LNG Terminal, is a proposed LNG terminal in Brunsbüttel, Germany.

Location

The terminal is proposed for Brunsbüttel near the Hamburg region.

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Project details

  • Owner: Gasunie; Oiltanking GmbH; Vopak LNG Holding BV (Vopak LNG)
  • Parent: Gasunie; Oiltanking GmbH; Vopak
  • Location: Brunsbüttel, Germany
  • Coordinates: 53.9140009, 8.9760945 (approximate)
  • Capacity: 8 bcm/y[1]
  • Status: Proposed, pre-FID[1] (expected 2023)
  • Type: Import
  • Cost:
  • Financing:
  • Start year: 2026[2]

Background

In January 2017 Dutch natural gas company Gasunie said it planned to start work that year to develop “a midsize LNG terminal in the Hamburg region” for Germany to import natural gas. The company plans to set up an import terminal of up to 3 million tonnes per annum (mtpa) to include a dedicated jetty for marine bunkering. Gasunie is looking at sites near Hamburg on the River Elbe, at Brunsbuttel and at Stade.[3]

In July 2017 Gasunie, along with Oiltanking GMBH, and Vopak LNG Holding BV, received approval under the European Union Merger Regulation to establish a joint venture for owning and operating a 2-3 million tonne/year LNG import terminal in Germany, the country’s first. The three companies were investigating the possibility of building and operating the terminal at Brunsbüttel along the Elbe River close to the city of Hamburg.[4] Vopak, Gasunie and Oiltanking planned to undertake feasibility studies for the site but have yet to make a final investment decision. They will now examine the technical, nautical and regulatory assessments and the permitting requirements.[5]

In September 2018 RWE and German LNG Terminal GmbH signed an agreement to take most of the capacity from the terminal.[6] It also included a cooperation agreement with the world's leading LNG buyer, Tokyo Gas.[7]

In December 2018, Woodside Energy Trading and RWE signed an LNG supply deal primarily from the Corpus Christi LNG Project in Texas. According to Food and Water Europe, "Simply put, the German utility wants to buy more US LNG as Trump promotes gas riches in Europe."[7]

As of 2019, according to Euro Petrole, preparations for the terminal's permitting approval process were underway. A "scoping meeting" took place at the end of January, 2019 in which the approving authorities, environmental organizations, experts, and others met with German LNG Terminal GmbH to discuss the subject, scope and method of the environmental impact assessment regarding the water and emissions legislation as part of the overall planning approval process. Obtaining construction approval is one of the conditions for making the final investment decision by the end of 2019. Construction work will start in 2020 with operations expected to commence in 2022.[8]

According to Food and Water Europe, the federal state government wants to use €50 million euros of public money to fund the unprofitable €450 million euro project. Based on federal subsidy arrangements, this would automatically trigger an additional €50 million euro from the national government.[7] Long prior to this, market analysts had questioned the financial security of the project, which authorities have continued to ignore.[9]

In September of 2019, RWE announced that a final investment decision (FID) would be made no later than early 2020. RWE also announced that they'd chosen four prequalified potential partners and had potentially secured 5 billion cubic metres of import capacity if the project goes ahead. Potential suppliers include Qatar and the United States.[10]

According to Food and Water Europe's 2019 profile on German gas use, "...[Hamburg LNG Terminal] would have a throughput capacity of about 5bcm per year and have access to the German gas grid. Prime Minister of Schleswig-Holstein and the Mayer of Hamburg have already announced their support for this €400-450 million project and committed to contribute €40 million. The gas imported might also be used by Yara, one of the 'Exxons of Agriculture' located close by, to produce fertilizer and is very likely to import fracked US gas. The promoter expects construction to start in 2020 and the terminal might start operating by 2023. This “German LNG Terminal” is planned to be built by Dutch Vopak LNG Holding B.V. and Gasunie as well as German Oiltanking GmbH.[11]

As of January 2020, the terminal still faced four major hurdles prior to achieving FID. These included securing financial backing, guaranteeing sufficient commercial deals for long-term use, acquiring the relevant nautical and land-use permits, and ensuring regulatory approval for the plans.[12]

In March of 2020, German LNG Terminal GmbH announced that it has garnered significant interest, and is ready to sign heads of agreement (HOA).[13]

In June 2020, German LNG Terminal GmbH said it was confident of reaching a positive FID for the project not long after the end of 2020. The company said it was in the final phase of negotiating fully binding legal contracts for potentially 5 billion cubic metres of LNG imports with RWE, Germany's largest power producer. The groups also said they had agreed to explore whether the terminal infrastructure could be adapted to handle hydrogen.[14]

In November 2020, German LNG Terminal GmbH announced that it had reached another milestone towards achieving FID after receiving a decision from German regulatory authorities exempting it from tariff and network access regulations on a long term basis. The decision remained to be reviewed by Germany's Federal Cartell Office and the European Commission.[15] With FID being aimed for in the first half of 2021, RWE's CEO Markus Krebber also said, "We are very optimistic that we will get enough supply contracts, and also offtake contracts, to get the project over the finishing line." The comments came a week after Uniper revealed it would not be proceeding with rival plans to import LNG at its proposed Wilhelmshaven LNG Terminal due to a lack of interest in long-term contracts.[16]

In June 2021, German LNG Terminal GmbH said that it was planning to file an application to authorities by the end of the month for planning permission.[17]

In November 2021, the Dutch company Vopak ended its "active participation" in the project, with its CEO Eelco Hoekstra commenting that "the momentum commercially is not in full swing today." Vopak will continue to support the project, "but we'll do that in a more passive manner until conditions might change for the better," noted Hoekstra. No binding capacity contracts had yet materialised for the Brunsbuttel project to advance.[18] It was also reported that Marcel Tijhuis, head of business development at the proposed LNG terminal, said the project faced "big challenges" ahead. Environmental permits were said to be taking longer than expected to secure, according to a source familiar with the project, making the start of the project unlikely before 2025.[19]

In January 2022, a spokeswoman for the project was unable to provide a timeline for the project's FID, commenting: "[I]t is a very complex, cost-intensive, and long-term investment. In times of the Corona pandemic, it is more difficult than ever to make reliable statements about the exact timing of the project". A public consultation process concerning planning approval for the project was reported to be forthcoming.[20]

In February 2022, a floating import terminal at Brunsbüttel, Brunsbüttel FSRU, was proposed in the wake of the European gas crisis and Russia's invasion of Ukraine. The FSRU was proposed to add short-term import capacity as the onshore terminal gets built. The 2022 TYNDP continued to list the Brunsbüttel LNG Terminal as a proposed terminal moving toward FID (2023) with capacity of 8 bcm/y.[1]

Articles and resources

References

  1. 1.0 1.1 1.2 "TYNDP | ENTSOG". www.entsog.eu. Retrieved 2022-08-02.
  2. Sanja Pekic (2022-07-20). "Construction of Brunsbüttel LNG terminal kicking off in September". Offshore Energy. Retrieved 2022-08-02.
  3. Karen Thomas, "Gasunie plans midsize LNG terminal near Hamburg," LNG World Shipping, 04 Jan 2017
  4. Christopher E. Smith, "Gasunie, Oiltanking, Vopak study building Germany’s first LNG import terminal," Oil & Gas Journal, 07/12/2017
  5. Karen Thomas, "Brussels approves Germany LNG terminal plan," LNG World Shipping, 12 Jul 2017
  6. RWE and German LNG Terminal sign capacity contract for Germany’s first LNG terminal, Port of Hamburg, Sep. 7, 2018
  7. 7.0 7.1 7.2 Andy Gheorghiu, World Upside Down: Voters Trust German Greens to Handle Climate Crisis Just as Party Throws Support for American Fracked "Freedom" Gas, Food and Water Europe, June 21, 2019
  8. German LNG Terminal Signs Another Commercial Agreement: Market Continues to Show Strong Demand, Euro Petrole, accessed December 12, 2019
  9. Lucie Roux, German LNG projects are taking shape, but does the market need them?, S&P Global, July 23, 2019
  10. UPDATE 1-RWE expects Brunsbuettel LNG terminal decision by early 2020, Yahoo Finance, Sep. 30, 2019
  11. Germany, Food and Water Europe, accessed December 4, 2019
  12. Nathan Witkop, German LNG terminal still faces 4 hurdles – developer, Montel News, January 27, 2020
  13. David Rowlands, German LNG Terminal gains interest, LNG Industry, July 23, 2019
  14. RWE, German LNG Terminal finalising import deals for Brunsbuettel, Reuters, Jun. 18, 2020
  15. Adnan Bajic, German LNG Terminal secures tariff exemption, Offshore Energy, Nov. 4, 2020
  16. Nathan Witkop, RWE expects lignite closure deal by year end, Montel News, Nov. 12, 2020
  17. Vera Eckert, German LNG terminal group at Brunsbuettel seeks building permission, Reuters, Jun. 24, 2021
  18. Stuart Elliott, Germany's HEH eyes binding bids for Stade LNG import capacity in January, S&P Global, Nov. 16, 2021
  19. Vanessa Dezem, German LNG terminal faces headwinds as major investor steps back, Bloomberg, Dec. 30, 2021
  20. German LNG import terminal continues to work towards FID, LNGPrime, Jan. 11, 2022

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